5 Tips to Buy the Best Investment Property Melbourne has to Offer

For those looking to buy an investment property, Melbourne’s real estate market has a lot to offer. According to data from realestate.com.au, investors buying units in Melbourne benefit from an estimated positive cash flow of $525 per month (at time of writing). This figure is based on the average rental yield of 5.4% and the median unit price of $449,000. If you buy the right property in the right location, your yield and positive cash flow could be even higher.

Here are five tips that will help you purchase the best investment property Melbourne has to offer:

1. Figure out your objectives

Why do you want to buy an investment property? Melbourne is a favourite location for investors and provides opportunities to satisfy all objectives.

If an excellent yield and positive cash flow are your aims, then investing in an apartment is the better choice, and the passive income this choice provides could mean working less now or retiring earlier

2. Choose the right type of investment property to buy

Now that you have identified your objectives, you’ll need to think about the type of property in which to invest.

Today, apartment living has become more popular. Especially where the apartment benefits from easy access to work and recreation facilities. Remember, a house or apartment that is popular with tenants and owner-occupiers provides the demand to satisfy income objectives as well as supporting capital growth in the short, medium, and long-term.

3. Should you buy new or old?

Older buildings are often located in established neighbourhoods. You can inspect the property, but often will need to make renovations and upgrade to attract the best tenants.

New developments – including off-plan – offer the most modern in fixtures and fittings, and the stamp duty savings can be tremendous ($17,000 in this example). There are tax depreciation advantages too, and the maintenance costs are lower. New homes also benefit from lower energy ratings and lower energy costs that are attractive to prospective tenants.

4. Think about where to invest

Look for developments in areas where people want to live. While the individual house or unit is important, consider other factors that will make the difference to the success of your investment property performance:

  • Developments that are close to work or offer good transportation links into the CBD
  • Proximity to the restaurants, shops, and sports facilities that are important for today’s lifestyle choices
  • Being near good schools, parks, and water are always advantageous, and attract more interest from both owner occupiers and tenants

5. Deal with a reputable company

Property investment is not regulated like other investment classes, and property isn’t recognised in the same way that shares are, for example. This means that unprepared investors are targeted by spruikers and scam artists.

You should always seek advice before taking the leap, and always deal with a company that can provide evidence of their experience:

  • Ask to see testimonials from satisfied clients
  • Review projects that the company has completed in the past
  • Ensure the company has history and is set up to support its activities and those of its clients

What to do next

Cash savings struggle to keep up with inflation. The average dividend yield on shares is less than half the average rental yield on investment property. On average, Australian property prices double every seven to ten years. And property investors also benefit from a range of tax advantages not available to investors in other assets. However, despite the outstanding benefits of investing in property, the majority of Australians don’t own an investment property.

So few Australians own an investment property because they procrastinate. They worry about entering the market at the wrong time and end up never doing anything. If you have the right strategy and buy the right property, Melbourne’s increasing population and continued attractiveness as a place to live and work will support your objectives in all market conditions.

Home Port Property has a long and enviable record in the Melbourne market and has worked with investors from around the world. We value our clients and the long-term relationships that we develop with them as we help them to achieve their individual objectives.

Click here now, and join our exclusive group of investors. You’ll be the first to know about Home Port Property’s newest opportunities in Melbourne’s hottest locations, and that will give your investment performance a real kick-start as you move toward your objectives.