Rental Income Should Be A Priority When Buying Investment Properties

Property investors who are in for the long haul are very focused on buying properties with potential for strong capital gains over the years and this still holds true even in today’s market.

In saying that it is also important at this time to make sure that any property that you buy has potential for increased rental.  If you can buy a property where the rent is close to neutral gearing then you are well in front when prices start going up and rental income is again on the rise.

For this reason it is best to look in places of growth, where there is natural growth on the outer skirts of cities, where there is development of some sort going on in the next few years or properties in the area are being upgraded.

Each of these have potential for capital growth in the future.

Natural Growth

When buying in the outer suburbs of cities do make sure that you purchase near the transport route because many people who rent either do not have a car or only have one, leaving the other party needing to use public transport.

Often in these outer areas you can buy new and reap the rewards of high depreciation schedules.

Development

The very obvious one here is mining although the banks are starting to shy away from lending in for properties in mining towns. In saying that, some of the better prospects are not in the mining towns as such but at the ports and points of distribution for an area.

Area Upgrade

These areas are often in the outer suburbs of the CBD where the houses are very old but the demand on property is starting to drive up the price and with it the renovators are moving in and increasing the prices even further.

Or depending on the location it is possible to find a town that has been lying dormant for many years but due to planned growth or development in the area prices have started to rise.  Sometimes these types of property are found beachside in areas that are rather remote but which in time will become sought after destinations.

As you can see with any of these situations there is potential for growth and potential for increased rent over the years to come.

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