When it comes to property investment, not all properties are equal. Even the old saying of “position, position, position” may not necessarily be the case. Instead there are many factors that come into play when assessing an investment return. Many times over the years, in conversations, we have heard such things “I made $200,000 on a property that I renovated and sold”. Yet when you delve a little closer and ask “is that after acquisition, holding and tax costs?” the answer is always “no”. When you begin to apply these costs, they may have only made half of that net. To us, the net equity position and its return on investment are the most important figures.
That is why, over the years, we have learnt that a property has to have the following credentials to ensure that it delivers the best return on equity:
- HIGH RENTAL YEILDS WITH GROWTH
- NEEDS TO ATTRACT GOOD LONG TERM TENANTS
- LOW ANNUAL COSTS (rates etc)
- LOW MAINTENANCE COSTS
- HIGH DEPRECIATION ALLOWANCES
- HIGH LVR’S
- GOOD GROWTH POTENTIAL
- MINIMAL ACQUISITION COSTS
- HIGH LAND CONTENT
- ARCHITECTURAL STYLING THAT WONT DATE
