Property investment has long been a trusted way to build wealth and Victoria offers plenty of opportunities for those ready to take the plunge. Whether you’re considering residential or commercial properties, a metro or regional location, starting out with a solid understanding of the basics is important.
Why Invest in Victoria?
Victoria is known for its vibrant lifestyle, robust infrastructure and growing population. Melbourne consistently ranks as one of the world’s most liveable cities and attracts residents from across Australia and overseas. Outside of Melbourne, regional areas such as Geelong, Ballarat, and Bendigo are popular due to their proximity to the city while still offering a regional lifestyle. There is also the option to invest in smaller communities.
Types of Property Investments
Residential Properties: Houses, apartments and townhouses are all popular for both buyers and renters, depending on budget and lifestyle. With residential property there are options for both short and long-term rentals, although many local governments have restrictions on short-term rentals. The owner is generally responsible for all property costs (with the exception of usage charges such as electricity and water).
Commercial Properties: Offices, retail spaces and warehouses can provide higher returns but may require greater investment and risk management. As the owner, you can potentially pass on the ongoing costs of the property, depending on what is negotiated as part of the lease.
Getting Started
Research and Planning: Understand the property types in the areas you are looking at and who the ideal renter would be. Local amenities and proximity to transport can be deciding factors for potential renters. Consider rental yields and capital growth options in the area you are considering and ensure you keep informed of any changes in market conditions and government regulations.
Set Your Budget: Determine your borrowing capacity and account for additional costs like stamp duty, inspections, and legal fees. Ensure you know all of the costs relating to the purchase of the property. Knowing this prior to making an offer is vital, especially if you are buying at auction where your offer is unconditional.
Build a Team: Work with trusted professionals. This includes a property manager, mortgage broker, real estate agent and conveyancer.
Inspect Properties: Evaluate properties based on their location, how appealing they are to renters, as well as for potential for growth. Consider the property types in the areas you are looking at and who the ideal renter would be. While the type of property you buy may be restricted to what is within your budget, make sure you consider your long-term goals.
Purchase Time: When it comes time to make an offer, negotiate carefully and have contracts reviewed by a legal expert to ensure you know exactly what you are buying. You can always review the full contract prior to making an offer.
Avoiding Common Mistakes
First-time investors can avoid pitfalls by:
- Not overcommitting financially. Always leave a buffer for unexpected expenses.
- Conducting thorough due diligence on properties and locations.
- Planning for risks like vacancies and market downturns.
Investing in property is an exciting step, especially in a state that offers as much as Victoria. With careful planning and patience, you can make informed decisions and start building your property portfolio.
For help navigating your first rental property, reach out to enquiries@livingmelbourne.com.au. We’re experienced local market experts and can help you with setting optimal rental pricing as well as help you find quality renters for your property.
