There are three main ways to use an investment property:
Buy the property at a low price and sell it for a high price
Buy the property, renovate it, and sell it for a profit
Buy the property and rent it out over time
All of the above are common ways to invest, and you can get a home loan for any of them. The difference depends on what you are looking for out of your investment property. Did you want to buy a house for retirement and rent it out in the meantime? Do you intend to increase your day to day cash flow, build up equity, or increase your capital? Deciding what you are looking for is an important first step in property investment.
Commercial Vs. Residential Real Estate
These are two very different options for property investment. You’ll need to figure out what the property costs, what the renovations and maintenance costs will be, and what the amount it will rent out as for both. However, residential real estate is often easier to predict than commercial real estate investments. Often, leases are longer on commercial property and the valuation process differs between the two.
Deciding between the two means you should consider to what extent you are able to manage a property. Commercial property investment often takes more dedicated time to manage.
Consider What You Can Afford
Maybe right now you can only afford one smaller property. However, after paying off your home loan for a bit you might be able to use your equity to put a deposit on a second property. iLender offers low 10% deposits, making it easier to get started with your investment property portfolio.
Look at neighbourhoods that are up and coming. Location is the key, especially for rental properties. The largest profit gains come from investment properties chosen in the right area.