If you’ve been considering buying an investment property, then you may choose to take advantage of the current buyer’s market where positive cash flow properties are becoming increasingly common.

Remember that buying a rental property is very different to buying your own home, so keep your emotions in check and consider the following:

Investment properties are long-term investments – don’t be looking to make a ‘quick buck’.
Look at potential rental properties objectively – you want something that will appeal to your ideal type of tenant and is easy to rent.
Location is one of the driving factors for rental returns on an investment property, so make sure there is rental demand for the area.
It’s important to invest in an area with rental appeal, for example, close to schools, shops, transport, or close to parks and beaches.
If the property you’re looking at has been rented in the past, ask about its tenancy history.
If you purchase a property that needs huge amounts of renovation work, be aware that it could take a long time to recuperate your costs.
If additional bedrooms can be easily added by converting garage space or moving internal walls, this could increase the value and rental price.
A property that is easy to maintain will save you both time and money.
Be realistic about how much you can charge tenants. Do your homework and find out what similar properties in the area are rented for.
Do your maths and make sure the rental income combined with tax benefits cover the full cost of ownership – mortgage repayments, rates, repairs, insurance and other expenses..
Having the means to cope financially if something goes wrong is essential. For instance, additional finance may be required if the place is empty for a period or needs urgent repairs. It’s all about balance.

Your AMP Adviser can give you advice in context of your wider financial goals, which will help you make an informed decision.

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