Six questions you should ask before you buy your Australian investment property

FindAHomeLoan Australia

Buying an investment property in Australia – as foreign investor (or an expat) is a big decision. There’s some key questions you should ask before you buy. The answers to these questions should help you to make the right investment decision.

1.   What are your investment goals?

For example, are you looking to maximise your capital growth, rental income, or both?

If you’re looking to maximise your capital growth, are you planning on doing renovations? If so, what will you do, when will you do it and how much will it cost?


2. What are your investment property’s capital growth prospects?

Historically, well-chosen investment properties in Australia’s major capital cities (Sydney and Melbourne ) have shown the best long-term growth. In other more affordable Australian capital cities like Perth, the market is currently showing signs of an upswing. Real estate prices in Perth declined for a few years after Australia’s mining boom ended in 2011, but many analysts are predicting price increases from 2018 as a natural part of the property cycle.

The best locations in any Australian city are usually close to where many people work (like the central business district). They’re also close to schools/universities and have good shopping, entertainment and public transport facilities nearby.


3. What is the rental potential of your investment property?

You can get a good idea of this by looking at the average rental yields for investment properties in the area where you’re looking to buy. Looking at vacancy rates is also important. The more vacancies there are, the more choice that rental tenants have in choosing their accommodation. You obviously don’t want to have your investment property vacant for any length of time if you can avoid it, especially if you’re relying on rental income for your loan repayments.

Investment properties with the lowest vacancy rates tend to have similar characteristics to properties with the best capital growth prospects. They’re usually in high demand because they are close to places of employment, schools/universities, shops, public transport and entertainment facilities.


4. What is the true market price of your investment property?

You need to make sure you don’t pay too much for your investment property. It’s important to do your research so that you know the average market value of Australian properties in the area you want to buy. You can get a good idea of this by looking at recent sales of comparable property sales in the Australian city and suburb where you’re considering buying your rental property.


5. Is the property likely to need any costly repairs and maintenance soon?

If you’re holding a valid Australia permanent resident (PR) visa and planning on buying an older Australian investment property, make sure you get a building inspection done before you do. That inspection will reveal if there are any major issues that will cost you money in the short-term. If there are and you go ahead with buying the property, those costs will obviously impact on your investment return.

6. Are there any legal issues or restrictions on what you can do with the property?

Make sure you (or your legal representative) check with the local council in the area you’re looking to buy. This is especially important if you have renovation or redevelopment plans for your potential investment property. You need to make sure that there are no council restrictions that would prevent you doing what you want to do with it.


How we can help

At FindAHomeLoan, sourcing mortgage solutions from Singapore and Australia for overseas investors looking to buy 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!

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