When discussing investment properties in the Perth market with our clients, we have often used and heard the old saying, “location, location, location.” It is true that location is the major factor that will impact your properties capital growth potential.
However as property investors we also have to give major consideration to the properties rent-ability and rental return.
Cash Flow or Capital Growth?
While properties in prime locations such as the river, the beach, a cul-de-sac or a location providing a beautiful view perform above average in capital growth, for some reason they don’t rent for much more than houses in the area with median or mainstream locations. This forces investors to first determine which is more important to them: weekly cash flow or capital growth.
If you want more weekly cash flow and a rate of capital growth somewhere around median for the area, then you should buy your investment property in an area that doesn’t have “extras” such as the beach, river or cul-de-sac. On the other hand, if capital growth is the main factor for you, then you can buy a property in a prime location and enjoy the benefits of more capital growth when you decide to sell. As you grow and add to your portfolio it is a good idea to select properties to give you a mix of both.
Know Your Rental Market
Whatever your goal, it is essential that you get to know the rental market in which you are investing. Whether you value weekly cash flow or capital growth more, there are some fundamentals that are common to both.
It is extremely important that you know what renters and buyers are looking for in the area. Capital growth has a median number; that means half of the properties in the market will perform above that number and half will perform below. It is essential that you find which areas within a suburb are performing above the median and that you make it your business to know why before you buy.
Get the Investor’s Edge
We are experts in handling investment property in the Perth market. We have experience, know-how and access to crucial market information. Let our experts help you find the best property for your investment goals.
Call Call 1300 472 427.
