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The Signs of a Good Investment Property

There’s no flashing neon sign or light bulb moment when you find a good investment property, but there are a few key things you can look out for that will give you a better idea.

Don’t go into investing blindly, make sure you’ve done your research, got some sound advice, and the property you have chosen is primed to provide your desired outcome.

Here’s some tips on how you may pick a good investment property:

Low DOM

DOM (days on market) refers to how long the property has been for sale. If the DOM figures are quite high, it’s a good idea to ask yourself why.

If properties are on the market for a relatively shorter amount of time compared to other markets, this could also indicate that properties are selling quickly and there’s strong demand in the suburb.

Other listings in the area aren’t offering concessions

You’ve probably seen the offers of 4 weeks free rent or a free iPad, but these should be warning signs for any prospective investor. It can mean the property is having difficulty finding tenants, and possibly the entire suburb.

It’s ready for tenants

You’ve fallen in love with a fixer-upper. There’s no shame in it, they can be charming. But before you sink all your money (and more) into it, take a step back and look at it realistically.

The ideal investment property should give you the least amount of work. Things will no doubt pop up along the way (like repairs and maintenance) so why give yourself more headache and expenses before your tenants move in.

Location is generally desirable

People buy in certain areas for different reasons and to appeal to different demographics, but a good way to increase your rental odds is to choose a location that appeals to a wide range of people.

Think about the distance to public transport, shops and supermarkets, schools, and city or town centres.

There’s few ifs and buts

Ifs and buts, ie. “If the kitchen was updated, this would be a great property” or “It’s not in a great location, But I’m sure there’s someone out there who’d rent it.”

It’s impossible to find the perfect property, but don’t be duped into a property with too many Ifs and Buts.

Many investors make the mistake of buying with their hearts, not with logic. Yes, it should “feel” right, but the numbers should add up as well.

The list is not the be all and end all, but it gives you a good overview of the things to look out for.

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