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IT’S the time of year when we all start to think about going on holiday and when real estate agents prepare for an onslaught of visitors dreaming about a permanent sea change or an investment property.

So if it’s not just a passing fancy that disappears after you’ve arrived home and vacuumed all the remaining sand out of the car, check out the five things Gold Coast buyer’s agent Tony Coughran of VFM, reckons you must consider when buying in a lifestyle location.

He said buying in a lifestyle location can be risky, particularly if you are not an experienced investor and if you get it wrong you can lose a lot of money.

‘In holiday destinations, rental returns often depend on the local tourism economy which can be strongly affected by global financial markets,” he said.

‘The key is knowing when to buy and at what price.’

Mr Coughran said while it was great to pursue those property investment dreams, a little bit of work at the outset could stop them from turning into a huge financial mistake.

His tips are:

IDENTIFY YOUR NEEDS

The first step is to identify what it is you want from your investment. Is it a holiday home? is it purely for investment or is it something you may look to retire to? This can help determine where you buy and what type of property is suitable.

LOCATION

Once you have determined what it is you want from your investment property, the next consideration is location. Areas close to the beach or outdoor attractions and infrastructure are preferable as are properties in sought after school areas.

Mr Coughran said any investment in a peripheral area or in areas that lack social infrastructure should not make the cut.

RESEARCH DEVELOPERS IF BUYING OFF THE PLAN

If buying-of-the plan, the developer should ideally be someone who has delivered quality properties in the past, according to Coughran.

He said it was essential to do property due diligence. Find out if the developer has the land tile, if his financial position is sound and the appropriate permissions and certifications are in place.

TENANTS

When buying a lifestyle investment, it’s easy to get carried away with the emotion of a holiday destination.

Mr Coughran said to remember it was an investment which needed to be tenanted in what was often a highly competitive market.

‘Generally look for properties that can deliver five to seven per cent minimum gross yields, low vacancy rates and little or low body corporate fees.”

AVOID

Avoid off-the-plan high-rise units and investment houses, where supply outweighs the demand.

‘ Small basic rental box homes on lot sizes under 40sqm, with room sizes under three-by-three metres should be avoided, especially if marketers are involved,” Mr Coughran said.


Posted by News Limited Network on 10th November, 2014