Though it is tempting to start your hunt for an investment property with the search itself, finding property is actually the last step of the process. Examine your financial position and figure out how much you can borrow first, then look at real estate.
Welcome to part three of Toni’s three-part series around building wealth through investment property. Today she reviews the three ways you generate income through a real estate investment, explaining how land breeds an increase in capital growth while the property itself has a greater impact on rental returns.
Toni teaches you how to research capital growth and do the necessary math to determine how much rental return you need to cover a mortgage payment. She also speaks to the concept of thinking like a tenant, considering features like car space, proximity to the city, and view when determining potential rental return.
Toni wraps the episode with a reminder that there are no guarantees when it comes to investing in real estate, as circumstances beyond our control can influence property value. Listen in and learn how to minimize your risk and find an investment property that offers the right combination of rental return and capital growth!
- Why choosing an investment property is a ‘sharp pencil exercise’
- The three ways an investment property generates income
- Why land increases in value while property decreases
- How to research capital growth potential
- Why apartments afford a bigger rental return but less capital growth
- How to think like a tenant
- The pros and cons of weatherboard vs. brick
- How capital growth may be affected by circumstances beyond your control
- The features of a property that attract tenants
- Why Toni recommends two-bedroom properties
- Why you shouldn’t even look at properties you can’t afford
Learn More About Finding Property
Access Toni’s free email course, Buying Your First Property, at http://planinsek.com/property-resources/buying-first-property/.