If you’re an overseas non-resident investor (or an expat) looking to buy property in Australia, you’re probably excited about the opportunity. But there’s one very important thing you need to remember: It is not about you!
When you’re buying an investment property, its potential to generate ongoing rental income and future capital growth should be your two primary investment considerations. You’re not buying a home to live in yourself, so you need to make the purchase decision with your head, not your heart.
In other words, you need to look at an investment property from the perspective of others (like potential tenants and future buyers), not from your own perspective. For example, if you buy a property in an undesirable location because it’s at a bargain price, you’ll find it both harder to attract tenants and harder to resell in the future. Both of those factors will impact significantly on your investment property return.
Here are the major factors you should be considering when choosing an investment property to buy.
There’s an old saying that the three most important considerations when buying real estate are ‘location, location and location’. It’s especially true for investment properties. You’ll find it much easier to both attract tenants now and resell your investment property for a good price in the future if you buy in a good location.
And when it comes time to sell, you’ll be selling to a local, not to another foreign buyer. That’s because current Australian government policy is to only approve foreign investment into new Australian dwellings, not established properties.
Good locations are close to where many people work (like the central business district), as well as to shops, schools and parks. They also have good public transport facilities. What you perceive as a good location in your home country may not be what the locals like in Australia. Buy where the locals want to stay.
Choose an investment property that’s low maintenance. Many potential tenants will be turned off by any high maintenance tasks that they’re responsible for, like the need to maintain extensive gardens if an investment property has them. They’ll be more attracted to low maintenance properties instead.
Low maintenance properties also benefit you as the non-resident landlord. You don’t want to have any maintenance hassles or major expenses with anything that you’re responsible for, like any issues with the structure or exterior of the house. Low maintenance investment properties tend to be newer ones that aren’t likely to need repairs in the short to medium term (i.e. within the next seven years).
3. Indoor/outdoor space
Choose an investment property with sufficient indoor/outdoor space that will attract as many different types of potential tenants (and future buyers) as possible. The floor plan is important (number of bedrooms, bathrooms and living areas).
Ideally, your investment property should be suitable for both young professionals who like to entertain guests as well as families. That will help to ensure your investment property is always in high rental demand. It will also improve your future capital growth prospects.
How we can help
At FindAHomeLoan, sourcing mortgage solutions from Singapore and Australia for investors looking to buy investment property in countries like Australia is one of our specialities. We can help you to navigate Australia’s mortgage lending restrictions.
We would be happy to speak or meet with you to discuss your needs and goals. We believe you should have a mortgage partner. Just like you engage a mechanic to make your car run smoothly, we can do the same with your investment property financing.
We’ll take the time to understand your circumstances and provide the best advice.
Contact us now to find out how we can help you!