A cheap investment property might be attractive because of its price and its ability to give you instant equity, but what if it’s harder to attract tenants? What is its potential to grow in value? As with any investment, you must analyse the pros and cons of your decision.
Many people look at certain investment properties because they’re a cheap entry point into the market or because the vendor will sell at a bargain price. These are all short-term benefits and should be weighed up against the long-term disadvantages.
If you recognise any disadvantages with the bargain property, ie: poor plan, location, neighbourhood, proposed nearby projects/infrastructure or need for renovations/repairs, these factors should be weighed up to see if they’ll limit the attractiveness for tenants or its future sale value. If it looks doubtful then the short term gain on cheaper price just might not be worth it.
Conversely, an investment property that has everything ticked off – such as location, direction, parking, size, condition, proximity to transport – is likely to attract a lot of attention and demand, even in a market that isn’t hot.
Always get an independent valuation before you buy.
A cheap investment property might be attractive because of its price and its ability to give you instant equity, but what if it’s harder to attract tenants or perhaps isn’t likely to grow in value?
Property Friends is a specialist Property Investment Advocacy that has been operating for the last 13 years on the basis of 3 principles: Trust, Community & Progress. www.propertyfriends.com.au (03) 9758 5331
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