Are you contemplating the purchase of an investment property?
According to some experts, 2023 could be the year that astute property investors re-enter the market, as they believe that all the necessary elements are present to generate opportunities for strategic investments. Let’s examine these factors more closely.
Why now could be a good time to invest
- Property prices are coming down in many markets, while rents are on the rise. Rents surged by a record high of 10.2% in 2022, reaching a median of $555 per week.
- Vacancy rates have been at record lows, with strong competition amongst renters for available properties.
- Migration has returned and overseas students are back. In recent headlines, more than 40,000 Chinese students may return to Australia after the Chinese government stopped accrediting overseas online learning qualifications.
Here are some tips to consider when purchasing an investment property:
- Plan ahead and budget: Given the fluctuating interest rates and rising cost of living, it’s important to budget ahead and plan for contingencies when buying an investment property. Account for potential rate increases and unexpected expenses.
- Obtain inspection reports: In 2023, we may see more distressed and mortgagee-in-possession sales. Although these properties may seem like a bargain, they could potentially come with defects. To avoid issues, make sure you get building and pest inspections done before making a purchase.
- Consider other areas to invest: Finding the right property in the right location is key to smart investing. Don’t limit your search to your local area; there may be opportunities in other markets.
- Explore finance options: With the cost of living on the rise, finding an investment loan that offers value for money is crucial. Whether you want flexibility, a competitive interest rate, or both, we can help you find a loan that suits your needs.
- Stay informed about the market: Keeping up-to-date with interest rate fluctuations, property prices, auction activity, vacancy rates, capital growth trends, rental returns, and yields is essential when planning a 2023 property purchase. Resources like CoreLogic can provide valuable insights into the property market.
- Negotiate: Once you understand the local property market, you’ll be in a better position to negotiate. Vendors may be willing to discount if property values have fallen in the suburb you’re buying in or if properties are remaining on the market for longer. Don’t be afraid to negotiate for repair requests or other aspects you desire.
If you’re interested in purchasing an investment property, we can help you with your investment property finance and assist with pre-approval. Contact us today to get started on your investment property journey.