Property investors are welcoming the opening of Australia’s borders in the aftermath of the pandemic lockdown, with predictions of a turnaround in rental income growth.
Landlords on the east coast of Australia are likely to be the greatest beneficiaries of the change in immigration policy as their markets suffered the most severe downturns, with rental incomes falling more than 10% in some markets.
Property industry researcher CoreLogic reports that visa preference is being given to students, which will boost the rental market in inner-city areas near universities.
A slow but steady return to previous immigration levels presents an opportunity for investors who may have delayed further property investments when the barriers came down.
CoreLogic predicts Sydney, Melbourne, Gold Coast, plus the Sunshine Coast, will be key destinations for the next wave of immigration. Some 45% of immigrants will settle in our two biggest cities.
Other influential factors for immigrants include local job opportunities, affordability and the location of family or their cultural community.
Below are some key factors to consider when searching for an investment property.
Determine the demand for rental accommodation in the area that you’ve identified for your investment. Neighbourhoods with solid employment, education opportunities and health care are all great locations.
Check-out local rent levels and watch for rental properties similar to those you want to purchase. There are two issues here – you don’t want to invest in an over-supplied market, and the rent must be sufficient to meet your financial obligations.
If you’re a little unsure about how your finances stack up, seek help from a financial adviser before making any commitment. Run your numbers past your accountant to ensure you are ready for the potential impact on your cashflow and tax position. If looking specifically for a property advisor, look for one who is accredited with PIPA – Property Investment Professionals Association Australia.
Being a landlord isn’t just about counting the rent money. You want capital growth over the medium- to long-term. You’re welcome to talk with a colleague at our agency about local prices trends to satisfy yourself that your property will gain value.
Do you want to be a landlord?
Obligations come with being a landlord. You’ll need to budget for maintenance, and you’ll occasionally have to pay for major repairs. Good tenants can be hard to find, and eventually, even the best ones leave. So be prepared for some work, or hire a property management company for a percentage of the monthly rent.
Ready for commitment
Property investment is not just a financial transaction but a life decision. You shouldn’t flip investment properties quickly without a sophisticated strategy. Stamp duty costs can make this an expensive option. Take a long-term view of your wealth creation.
As an experienced agency in the area, we have a selection of properties that are excellently positioned as potential investments, and our property management team has years of experience in helping investors set rental prices, selecting tenants and looking after any day-to-day issues. If we can help you, don’t hesitate to reach out.