Investment Property Red Flags

When buying an investment property, there are factors that you need to consider to ensure the property is a good deal.

Today we are looking at the 'RED FLAGS' and it more often than not comes down to numbers.

You know doubt are aware of how supply and demand impacts property: you are looking for a property that will provide good capital growth, in an area where the supply of properties is low, and the demand for living in the area is high. 

So what do you look for to make sure you stay away from suburbs that may look like a great place to buy, but potentially are a mine field?

Stay away from:

• Suburbs with a high vacancy rate which is combined with a large supply of properties. From a number perspective, if the vacancy rate is above 3% and the Stock on Market (SOM) is over 4% you are taking a big risk.  A high vacancy rate alludes to an oversupply of rental properties. Source
• A seller who won't provide data (vacancy rates, year on year profits etc. - this information is vital if the property is already a rental).
• The property that looks good on paper, but when you see it, there is a lot of work that needs to be done, and/or will require a lot of maintenance.
• Question the property that has been on the market for a long time. Is it just the price, or are there other factors that make this property less than desirable?

These are just some things to look for when you are considering an investment property.  Just a reminder we specialise in property management, not investing in properties, make sure you get solid advice from the right people.