What to Consider when Buying an Investment Property

Investment properties can be a great way to generate passive income, but they also come with a lot of risk. Before embarking on an investment property purchase, it’s important to do your research and get professional advice.

As professional property managers with vast experience in the Wellington rental market, we can offer some insights to help you make an informed decision. Here are some things to consider before you buy a rental property.

  1. Location: Location is key when it comes to rental properties. Look for properties that are in desirable areas, close to public transport, shops, and other amenities. Wellington has a diverse range of neighbourhoods with varying rental prices, so research the specific area before purchasing property there.

  2. Rental Demand: Consider the rental demand in the area you’re interested in. You want to invest in a property that is located in an area with a high demand for rentals and is likely to attract high-quality tenants. Talk to us to get an idea of the local rental market.

  3. Property Condition: The condition of the property is an important factor to consider. A property that is well-maintained and in good condition will attract higher-quality tenants and you’ll be able to charge higher rental rates. Look for a property that has been well-maintained, or alternatively, factor in the cost of repairs and renovations if it needs some work.

  4. Rental Income: The rental income you can expect from a property is an important consideration. Researching the average rental rates in the area and calculating the potential rental income you could receive, will help you determine whether the property is a good investment for you or not.

  5. Financing: Consider the financing options available to you. Talk to a mortgage broker or bank to determine how much you can afford to borrow and what your monthly repayments will be. Don’t forget to also factor in additional costs such as rates, insurance, and maintenance.

  6. Property Management: This is an essential part of owning a rental property. It can be much more work than you’d expect but that’s why hiring a professional property manager can make managing the property much easier. Property managers handle tasks such as tenant screening, rent collection, and maintenance, freeing up your time and ensuring the property is well-maintained.

  7. Legal Obligations: Owning a rental property comes with many legal obligations that you need to be aware of. Research the Residents Tenancy Act and other relevant legislation to ensure you understand your rights and obligations as a landlord. This is another reason hiring a property manager is a great idea!

Owning a rental property in Wellington can be a great investment, but it is important to do your due diligence before making a purchase. By doing so, you can make an informed decision and increase your chances of success as a landlord. Consider these factors carefully and seek advice if you need any assistance, our team is always willing to help and answer any questions you have.

Make an inquiry today!