Growth or Income… Which Investment Strategy is Best?

Have you been thinking of investing in a rental property? It may be your first step into investing, and you’re looking to buy in an affordable location that will help you buy where you want to live in the future. But where do you start? And, which investment strategy do you use?

Here are some factors to take into consideration when investing in a rental:

#1. Capital gain

When choosing your investment property, one thing to take into consideration is a property’s forecast capital gain. This form of investment strategy focuses on gaining capital on a property in a future market. It is important to do your research before deciding on your investment property.

Things like a property’s location, future development in the area and future employment opportunities can all play a part in the property’s forecasted value. These factors can often be determined by keeping up with news, speaking to the local council, local real estate agents, talking with people who already live in the area, and especially by speaking with our team at Vision Property and Finance.

#2. Rental Yield

A property’s rental yield can also play a very large role in determining the right rental property for your investment needs.

When determining a property’s realistic rental yield, it is important to not only look at a property’s gross rental yield, but its net rental yield also. This means that you not only find out what percentage of the property value you are yielding from your property’s rent annually, but how much you are actually making once expenses associated with the upkeep of the property are deducted.

This can be a great way to determine a property’s suitability to your investment plan if your investment strategy focuses on rental yield.

Finding the right strategy for you

So which is a better investment strategy? The truth is, every property is different and your best strategy for investment can largely be determined by the location you are looking to invest in, what your income levels are and what time frame you have to invest.

A great way to ensure your investment’s success is by backing yourself with a good property investment team, like Vision, as we sit down and listen to what your property objectives are and then help you develop the best strategy for your exact circumstances.

In the coming weeks, we will be looking at cash flow and how long term investing are important things to consider when designing a great investment property strategy.