Investors are always looking for the best return on their investment regardless of where they spend their money. In real estate, it can often be tempting to pick up bargain priced properties, slap on a coat of paint and start looking for tenants.
But before you get out the wallet and paintbrushes, it’s worth looking at what sort of returns you might get by spending a little bit more.
Chris Gray, CEO of investment property advisers Empire, suggests “Buy blue chip, median priced properties and hold onto them to ensure rental income and capital gains.” He has used this strategy for more than two decades and says it’s helped him attain good rental returns regardless of the wider market.
He goes on to advise on realestate.com.au that “Properties within 10–20% of the median price range for that area are affordable for around 80% of renters, so you will enjoy consistent yields.”
“While I advise against selling, these properties are also affordable for the majority of buyers, meaning you are virtually guaranteed to sell at a good price very quickly should the need arise”.
When looking to invest in the Bega Valley, it’s important to identify the type of tenants looking for rental accommodation. More often than not, the best tenants are families or professionals who are looking for a larger, higher quality property who are willing to pay a premium rental price.
So while it might be tempting to simply look at the sales yield by buying at the bottom end of the market, don’t forget about your potential rental yield and likely capital growth.
The experienced property and sales team at Fisk & Nagle First Choice are happy to advise you on how a bigger investment can make for a better rental return.