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How To Choose An Investment Property Fairchild Group, Sydney-Australia

A preferred field of investment, because of its many advantages, is real estate. Property investment is always lucrative because of the simple fact that people will always need homes and businesses will always need a location to operate from. In addition, the population is growing, which means there will always be a strong demand for homes.

Many people are beginning to realize the importance of investing, especially in real estate. The issue then becomes how to choose a property to invest in. There are eight different factors to consider.

1. Capital Growth Rate

Capital growth rate is hard to determine exactly, as different market factors come into play. However, overall, property prices are rising quite sharply, which would suggest there will soon be a slowing down of growth, albeit not a decline. Meanwhile, capital growth rate is expected to be relatively faster in Sydney and Melbourne.

2. Population Growth

Population growth is equally important. The next generation will require a place to live, after all. It is becoming increasingly difficult for people in Australia to buy their first home, but there will still be an increased demand in properties. However, there may be some slow

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down in population growth, as people find out that they cannot afford to have more children. 3. Residential Vacancy Rate If you purchase an investment property in an area with a high vacancy rate, it is likely to be an undesirable neighborhood. This means that it would be difficult to rent out the property as a landlord, and to sell it at a later stage in order to profit from the investment. On the other hand, if the property is truly cheap, this can work as an advantage should the neighborhood be planned for regeneration. 4. Established and Planned Infrastructure In line with regeneration, you need to understand what is planned in terms of infrastructure around the property. Better access to certain services, for instance, will increase property value. However, the addition of a runway to an airport at the back of the property would lower its value. 5. Median Property Price An investment property, if at all possible, should be just below the current median property price. This will mean that you have a better chance of selling it at a profit later on. Do also compare this price to the rest of the geographical area, or similar communities, to help you determine if the area is more or less desirable.

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6. Rental Yield

Investment properties may be purchased with the intention of renting them out for a certain period of time. The yield has to cover at least your mortgage and preferably other costs as well. In fact, some people can find having a rental home to be very profitable. 7. Tax Effectiveness Property taxes may be associated with the type of mortgage you have. Hence, ensuring you choose something that is tax effective will ensure a more secure investment. 8. Little Luxuries The little luxuries are the things that a person cares about. These are things like a great view, a modern kitchen, or an extra bedroom. They tend to increase the value of the property in the eyes of that person.

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