Artarmon Units - a good investment?
Perhaps you bought a unit or townhouse in Artarmon a few years ago - would it have been a good investment or could you have done better?
There are many factors which contribute to the investment potential of a property and they all need to be assessed relative to your specific requirements. This is especially true for a home rather than a place being purchased purely for its income and possible capital growth. In this article I am only examining investment property. I am not considering other alternatives.
The most important factor is actually time. Historically speaking, properties held for a reasonable period have always gone up in value. So in principle, virtually anything you had bought would now be worth substantially more. This is the key rationale for getting into the property market sooner than later notwithstanding varied media predications.
The main criterion for it begin a 'good' investment has been the same for all time and that is location. Taken in the broadest sense it means buying where the most number of people want to be. This includes items like aspect, outlook, elevation and convenience to shops, transport and other facilities. It is not to say you should buy the most expensive property because it would have a poorer rate of return. The location therefore has to be balanced with affordability both to you and crucially to prospective tenants. They want certain things for the rent they pay and it is imperative to look at it through their eyes. They value location highly but also security and amenity. This includes standard of finish, laundry facilities and parking.
An investment can be made better by upgrading it. This can be simple like painting and recarpeting through to complete refurbishing it.All is tax deductible, provides more rent and increases the value so why wouldn't you?
To summarise there are a few basic criteria.
- You have to be in the market to benefit. There is no point waiting for prices to go down. Around here at least they rarely have.
- The location needs to be desirable. You cannot change where it is and which way it faces.
- The property must offer the sort of accommodation and standard sought by the most tenants in the area.
- Opportunity exists to improve by more than the general market by tax effective upgrading.
Finally, the property also needs good management. It certainly will not be a good investment if the tenants do not look after the place or pay the rent.
E&OE
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