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Hobart property management: 10 tips on choosing investment property
For professional property investors, Hobart may seem like a dream. Demand is up, the Tasmanian capital’s population is growing, and the city is experiencing a growth spurt that’s pushing up house values. Baxton Property Management in Hobart provides some guidelines for how to pick the perfect property if you are looking to invest.
Queues form to view properties on sale and for rent in the capita at present, and the supply is not keeping up with this demand. And while this increase in demand has pushed the house prices in Hobart way up in the last 12 months, the median housing price in Hobart still stands way below the prices in other Australian state capitals. At the same time vacancy levels for rentals are dropping constantly.
Current figures show that most of the properties sold are still being bought by local residents and mainlanders planning to move to the area one day. However, some interest is being shown by interstate and foreign investors.
How to choose your investment property
- Use what you know: Choosing an investment property can take a good deal of research. Consider whether it won’t save a lot of time and effort if you buy in an area you are familiar with as you will have a good background knowledge base on which to start. Look at prices netted in recent sales of properties similar to what you are wanting. It will give you a good idea of what you can expect to pay.
- Check the demographics: Determine who is likely to be looking to rent your premises. Depending on whether it’s likely to be a group of students because the suburb is near the uni, or retirees because the area is a quiet one near shops and hospital, you’ll be looking for a different sort of property.
- Go with growth: Check how active the property market is to get an indication of which areas are experiencing or expecting the highest growth. These are the areas where there is potential for capital gains.
- Rental yield – Look for areas where rents are high compared to the property value.
- Low vacancy rates – Find out about the vacancy rates in the neighbourhood. A high vacancy rate may indicate a less desirable area. This will make it harder to rent the property out, or to sell it in the future.
- Planning – Find out if there are any proposed changes in the suburb that may affect future property prices. Things like new developments, or zoning changes, can affect the future value of a property.
What to look for
- Attractive features: Look for investment properties with features that will appeal to as many people as possible, like a second bathroom and a lock-up garage. Accessibility to shops, schools and transport is also a strong draw-card for the renters you will need to attract.
- Wide appeal: Find a property that will attract more than one segment of the rental market, such as singles, couples, young families or retirees.
- Low maintenance – Keeping costs down is important. Older homes, or those with features such as a pool or extensive landscaping, may cost more to maintain. Tax benefits of depreciation are also lower on older houses than on new properties.
- Property type – Units can be easier to maintain than houses. However you will have to pay body corporate fees.
Calculating the costs involved in investment property
There are going to be costs both in buying and owning an investment property. When it comes to buying one, some of the costs involved include stamp duty, conveyancing fees, legal costs, search fees, and pest and building reports.
Once you own it, you will be responsible for such ongoing costs as: council and water rates, insurance, body corporate fees, land tax, property management fees (if you use an agent), repairs and maintenance costs.
If you borrowed to invest, you will have mortgage repayments. You will also have to consider the possibility of having to pay tax on your rental income if your investment is positively geared, and you therefore earn more in rental income than you pay out in expenses like mortgage payments, maintenance and management.
Putting your investment property in safe hands
Managing an investment property, maintaining it and taking care of the tenants responsible for the rental yield at the core of investment success, can be both difficult and time consuming. Baxton Property Management in Hobart has handled 1billion AUD in property for owners, so it knows what works, and what doesn’t. If you are looking for a company to take this burden off your shoulders, visit Baxton on-line for further information on the services the company offers.
- 3 Property investment tips for beginners
- Important tax tips for property investors
- 6 tips when buying your first investment property
We hope you enjoyed this article
The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.
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