| The property rental market is growing as | | | | make sure it is large enough to meet the |
| properties become too expensive. Is this good or | | | | approval of your bank or lending institution. |
| bad? This is good news if you own an investment | | | | Evaluate returns - Gross versus net |
| property because maintaining a good occupancy | | | | The next step is to calculate the gross return or |
| rate is crucial to your investment success and | | | | yield based on the rental income and expenses |
| continued rental income. During property booms, | | | | incurred. Compare the rental yield trends against |
| investment properties are all about capital gains; | | | | other candidate locations. Rental growth may be |
| properties often jumped in value whatever you | | | | slower than the growth of the costs which will |
| bought. Unless you are in a property boom, | | | | rapidly eat away at your returns. |
| investors need to be more selective about the | | | | Manage vacancies using professional help |
| properties they buy. | | | | Around 25 per cent are renters, providing a huge |
| A good location could be everything | | | | pool who are housed in or looking for rental |
| Investment Advisers always talk about location - | | | | accommodation. Vacant properties can pose |
| For a successful property investment, you must | | | | problems for the investor and are a risk. Look to |
| look to buy the right property in the right location | | | | calculate on a loss of around 3-5 per cent of your |
| at the keenest possible price and with its | | | | gross possible returns for each vacant week. |
| long-term prospects in mind - in both terms of | | | | Assume that a property in good condition and in |
| good rental potential and capital growth. Evaluate | | | | the right location should have a low vacancy rate. |
| proximity to transport facilities, schools, shopping | | | | To help ease the management burden, you might |
| centres, sports and entertainment facilities and | | | | want to approach some local property |
| areas of future jobs growth. The property needs | | | | management agencies to see if they can help. |
| to be located in a safe, clean, attractive | | | | What to look out foro Low rental income.o Tax |
| environment and the area will have an already | | | | structuring not considered.o Wrong loan/mortgage |
| established high rental demand. | | | | taken out.o Inflated purchase priceo Poorly |
| Buy only high Quality and avoid those that require | | | | selected location for growth.o Requires high |
| high maintenance | | | | maintenance.o High risk of vacancy. |
| The quality of the property is crucial. The building | | | | Continual to grow your rental portfolio |
| must be appropriate for the market - for | | | | Depreciation entitlements on properties can mean |
| example, with at least three bedrooms if located | | | | that units generally provide higher depreciation and |
| in a family rental area, or with some security if | | | | can often provide a better return than houses. |
| inner-city high-rise. It should be well-built and have | | | | Revalue your properties every year, so that you |
| low maintenance buildings and external areas | | | | can use your additional equity to negotiate a |
| (check that the gardens and any other outdoor | | | | larger loan which you can reinvest in another |
| areas are in good order). If it is an apartment, | | | | rental property. |