What data can I look at when investing in property?
There's a wealth of reasons to invest in property but when you're just starting off, the abundance of facts and figures can seem a bit overwhelming. You needn't worry, though. Here are just a few things to consider as a starting point.
You might think that property investment is all about the long-term gains and profitable resales, but finding and retaining tenants also plays a crucial role in supporting your income and meeting your loan repayments. If you're buying a home to lease out, vacancy rates can be an incredibly useful piece of information to have at your fingertips. They lay out how many properties are unoccupied, which can be a good gauge of how popular or in demand homes are in a particular region or suburb.
Property price trends
Of course, price still comes into play when investing in property. The attraction of real estate as an investment option can be its reliability – typically, if you hold a home for long enough, the value will go up over time. However, real estate tends to go in cycles. When you're looking at price data, it's worth keeping an eye out for trends. It can often be a fine line between purchasing in an area that is just about to take off, or selecting one that has already peaked.
This can also help you set some financial limits to ensure you don't overcommit yourself when it comes time to approach your mortgage broker about an investment home loan.
Time on the market
The third piece of information that you can glance over is sales data and the length of time properties are kept on the market. Shorter listing times can indicate that homes are in demand, which can have an impact on prices (particularly if supply is running low). On the other hand, longer periods can suggest waning interest. Similarly, a large number of sales in a particular area can indicate a popular property market.