Sunday 22nd October 2017
Before you buy investment properties in Australia, you may want to take a look at vacancy rates. These stats can tell you your potential to make a profit.
As you prepare to buy an investment property in Australia for the first time, you’ll want to spend hours poring over facts and figures to determine where you’ll be best positioned to make a profit.
One of the key statistics to look at is an area’s vacancy rate. When property in a given location is available for rent, how often does it get snatched up? If you know this, you can assess the risks and rewards associated with making an investment.
Vacancies running high in some cities
If you’re making mortgage repayments to pay off an investment home, you want to be sure you can earn enough in rent to offset that cost. The Property Council of Australia found that in many cities, that’s currently difficult to do, as ongoing vacancies are a major issue.
An oversupply of property for rent is an especially major factor in cities such as Brisbane, Melbourne and parts of tropical east Queensland. If you’re looking to buy here, you should beware that collecting rent won’t be automatic.
How to maximise your yield
When you go about buying investment properties, the price tag shouldn’t be the only statistic you consult in your research. The Australian Securities and Investments Commission recommends instead looking at the rental yield – in other words, how much are you paying for your mortgage, and what’s the ratio of that figure to the rent you’re collecting?
Ideally, you’d be able to calculate that ratio not just now, but in the future as well, looking at how upcoming legislative or demographic changes might affect your earning potential. If it looks like you’ve found a favourable investment, the next step is figuring out how to get a home loan.
How we can help you build your wealth
If you’re looking to use property investment as a means to build your wealth over time, the first step is finding a way to get some starter capital without dipping too much into your savings we can help with that. Connect with us today!