1. Your financial capacity.
This does not mean your pre-approval amount or the maximum the bank will lend you, but what level of on-going contribution is comfortable for you personally. It is critically important to understand what your nett out of pocket weekly expenses will be having taken into account all of the costs of owning your investment property. Having absolute clarity around your numbers will inform what types of properties, in which price range, in what locations you should be targeting. Suburb median prices vary greatly, as do rental yields and average annual vacancy periods.
All of these factors have a bearing on your ability to comfortably hold an asset over the long term, which will ultimately determine your success as an investor here.
2. What is the true value of the property you are considering?
Not the list price minus 5%. Not the estimate by free data reporting websites or the vendor appointed selling agent, not your feeling. But a quantifiable, research backed, emotionally detached valuation based on directly comparable sales and lender assessment. Investing is all about the numbers. Buying well, having optimal finance structures, good local support, and being able to service any post rental income contributions comfortably is key.
3. What is the demographic make-up of your targeted suburb?
What percentage of owners reside there in comparison to tenants? What is the crime rate? What is the median household income and what types of rental properties can they afford? Sometimes cheap is not better – entry level properties and the tenants they can attract, whilst they make look appealing can be the cause of significant stress and financial ruin.
4. What are the locally favoured and sneered at suburbs?
It’s easy to look at a map and make assumptions based on radius from the city, the water’s edge, apparent proximity to employment nodes or mainland written ‘hotspot’ reports. But Hobart locations and their widely accepted demand levels run deeper than macro level reporting. This is an incredibly ‘patchy,’ deeply sentimental town with a huge amount of variation between suburbs. Full of nuances and areas with stigma ingrained from decades past, its critical to get a local’s insight in to where to avoid.
5. Good properties sell FAST.
And we mean lightning fast. And quite often, off market – ie they aren’t even listed on realestate.com. Whilst Covid may have slowed some markets, the opposite has been true of Hobart. Pent up local demand for quality homes in established suburbs has been exacerbated by never before seen levels of demand from interstate and O/S buyers. Its important to have your finance pre-approved and advisors (agent, building inspector, property manager etc) identified before you get serious about looking – when the right home comes up there will be competition so its important to be able to move fast.
In addition to the actual inspecting + negotiating of properties on your behalf, we believe our resounding success as leading buyers agents is in the time we invest with investors before even considering commencing the shortlist process. Before you decide whether to commit, we can help with your investment/finance modelling, aid you in clarifying your overall strategy, as well as taking the time to ensure you have a really good understanding of the dynamics of each area and the overall process. By dedicating sufficient time here, our clients are able to engage us and commence their searches confidently, strategically and effectively. No false starts, no second guessing themselves, no mistakes. Get in touch to schedule an initial complimentary phone/zoom consult at a time that suits.