There’s no one right answer; any type of property can be a good investment or a bad investment.
Not to over complicate the decision, but it does depend on a number of factors. For example:
- Age: How old is the property you are considering?
- Condition: What condition is the property in? To what extent will it need to be repaired or upgraded?
- Size: Is the property big enough to suit your needs and be attractive to renters? Is it small enough for you to be able to manage it effectively without huge maintenance costs?
- Expected rental yield: How much income do you expect to be able to gain through renters? Will it be enough to cover all your expenses?
- Strata fees: Are there strata fees? How much are they?
- Strata management situation: Does the strata management align with your needs and goals? Will you be able to rent your property the way you want to? Do they have big expenses planned for the complex that are not justified?
- Location: Is the property located in an area where it will attract good tenants? Is the area going through improvement? Is there any major infrastructure proposed that would improve transport, amenities or desirability of the location?
- Rentability: How attractive will the property be to tenants? What is the rental vacancy rate in the complex and the suburb? Will it be easy to find a quality tenant?
- Price: Can you afford to purchase and maintain the property without putting too much of a strain on your budget? What have comparable properties sold for
- Your personal situation: How much of a stomach for risk do you have? Are you earning a high income and would benefit greatly from depreciation? Do you have the money to improve the property if required?
What works for one investor may not work for another. All of the above questions can help you sort out what it is you need, and the answers are more important than simply what type of property you invest in. Set your criteria based on your own needs and wants and buy the right type of property for you – not for anyone else.
