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- If it is cheap because it is in poor condition but in a good location and structurally sound, it could be undervalued. Consider buying it as you can improve the condition of the property and quickly add value. This increase in equity will make it easier for you to buy your next property.
- If it’s cheap because it’s poorly located, really consider it. You can never change its location.
- Focus on houses in the lower price bracket for three reasons:
- Firstly, these sorts of properties can provide you with the best capital growth as they have a high land component.
- Secondly, properties in the lower price brackets have greater potential for an increase in value/price compared to those that have been bought in the high price brackets. There is a limit to how much a property will sell for in a low priced suburb.
- Finally, houses are more highly sought after than units in the outer suburbs as they appeal to families who are seeking rental properties. This tenant demand can result in relatively high rent.
Written by Peter Koulizos, university lecturer, author and buyers advocate. Peter will be presenting “The Essentials of Property Investment Seminar” on Tuesday 21st August, 6.30pm at The Vibe Hotel Sydney Central.
