Melbourne Property Investment Criteria

Whether you are a relatively inexperienced property investor or an experienced investor, if you are thinking about buying a specific property, there are a number of things we advise you to get clarity on before you go and spend  $500,000, $750,000, $1 million or even $1.5 million.

Capital Growth

What is the historical growth rate of the suburb you are looking at, compared to the Melbourne average?

What is the historical growth rate compared to Melbourne's top performing 25 suburbs?

If you think the suburb is irrelevant, look at the below table, which is based on Valuer General data.

Growth is, however, much more than the suburb.

Are you better off investing in Land, Apartments, Units or Houses?

Is this a good property? What makes a good property?

There are a number of attributes that are critical when purchasing investment property and, if you overlook them, you are missing out on significant amounts of capital growth. Is this worth the risk of not using a professional when you are investing $500,000 to $1.5 million?

Many options lead to many decisions, but is every decision you make an informed one?

Cash Flow

Ask yourself what is the likely rent you can achieve (and not just based on the selling agent's appraisal)

How does this yield stack up in the current marketplace? Am I better off in other areas?

Given my requirement of $400 per week to service my finance, am I better off buying an apartment, unit, townhouse or family home?

What are the chances of getting a tenant upon settlement? What is the area's vacancy rate?

What sort of tenant will rent this property?

These are the questions you need to ask yourself before you make a decision to buy.

What the agents will tell you and what we will tell you may be two completely different things, as we work for YOU and the agent works exclusively for the vendor.

Risk

What are the risks when buying this property?

What are the risks, in general, when buying an investment property?

The theory behind buying property is simple. In practice, without experience, knowledge and skill, the risks are real and people get caught every day. Investment, at its core, is a comprehensive understanding of risks.

So what are the risks when buying an investment property? Well, that depends on the property, the area, the price and, in essence, depends on how much you don't know.

The less you know, the more risk. Appointing a James advocate is a sound risk management strategy and an investment into making good and informed decisions, which leads to achieving the quality outcomes you deserve.