WHERE TO INVEST for rental return properties?
Why do we invest?
Speaking from personally investing for more than 30 years of experience.
Basically for 2 key reasons, for the capital appreciation (where the price of property increases compared to how much we bought it for) and the rental returns (where we rent out the property for the passive residual income). Sure there are other reasons, but these are the two prime reasons WHY people will invest and happy with their investment decisions.
We are talking about rental return properties today.
We want to invest in properties that bring rent to our bank account.
It may seems easy...
We just need to BUY the property then get an agent to rent it out to collect rent, right? NO!
Agents can do the best based on your property!
If you invest in a property in Timbuckto, where no one goes, if there is an agent there, the agent CANNOT RENT IT OUT!
When you invest in properties for rent, WE have to do our parts as investors!
We NEED to invest in RENTABLE properties!
Rentable properties mean:
LOCATION is IN-DEMAND
IN-DEMAND means 'convenience' to the tenants!
We want properties that are CLOSE to amenities, like train station, shops, schools, entertainment areas. When you invest, you NEED to know where these places are. The closer you are to the train station, bus, shops, shopping centre, entertainment hub, the BETTER, the MORE RENTABLE your property will be able to bring the residual, reliable income stream into your bank account!
DO NOT invest JUST BECAUSE IT IS CHEAP!
Many people did this, only to end up regretting.
Many say, "It's better than nothing, it is a GOOD starting point, invest in cheap property"!
WRONG, WRONG, WRONG!
I remember when I was ask to invest in properties where it is close to the proposed airport in Malaysia, everyone flock to buy, only to find out that it was NOT going to be there. The developer made a killing but the investors cried to the grave! The place was NOT rentable, even when given at a normal rate of $1.00, no one wants it, because they can just stay there for FREE anyway, they break in and have free stays and leave when they want, no commitment. Now, it is like a waste lang of building dilapidated, it is like a ghost town (that was in MALAYSIA)!
Like they say, "there is a sucker born everyday"... yes, there are still people who wants to BUY in the ghost town because it is SELLING BELOW CONSTRUCTION COST!
People will FALL for any believable reasons!
NOT you I hope and pray because NOW you know better!
Make sure you invest in IN-DEMAND area, so that your property can be rented out to produce the income stream you want into your bank account.
The beauty of IN-DEMAND properties is that it also have CAPITAL APPRECIATION!
Many invest base on RRI (Rental Returns Investment) or ROI (Return On Investment) which means they will INVEST when the RETURN is HIGH. Return as in HOW MUCH income it will produce based on the COST of INVESTMENT, when it is HIGH and IN-DEMAND, the investor will invest.
And YES, be patient!
DO NOT RUSH into investing, you will only end up regretting, investing is NOT cheap and you are RESPONSIBLE for the monthly instalments, your whole life can come crashing down if you made the wrong investment decision for your property investment, be patient because people sell because of many reasons, you want to WAIT for the IN-DEMAND and GOOD ROI/RRI properties!
Why would people sell that will affect your RRI?
More in the next blog...
Licence Real Estate Agent (LREA)
Oracodes Realty Pty Lt
Licence Real Estate Agent in NSW.