Growth and rental return are both important. Since you can't predict the growth rate in the future, you should consider properties with at least an average rental return, and go from there. Also, I don't know about areas outside of sydney and the greater Sydney & Central Coast areas, but in Sydney and surrounding suburbs, the rental yield for apartments is generally higher than for houses (purely for the fact that houses are so much more expensive). While the growth on apartments in Sydney are still relatively good, so that might be something to consider.
The combined total over the period you plan to invest is the most important. Whether this is skewed towards growth or cashflow (rent) doesn't matter as long as you can afford the property. If it's going to be tricky for you to make the repayments, then rental yield becomes more important.
Growth and rental yield change over time, so when you do your numbers, take into account how the market(s) you're looking at will change.
For me - both are important
If your investment is positively geared, and you have the cash flow to cover it then you have the option of a higher growth but lower yeild area ... but I wouldnt go too far that side either. Just a bit.
Its actually much more important that you consider and know well the market that you are investing in.
Do a LOT of research into the area so you know very well what house prices are, what they have done over the years and what their strengths are. What kind of buyer is around for that area (pointless having a family house if no schools or shops ... pointless having an executive apartment if there are way better options not far away)
what kind of other development is happening in the area? If you are buying an apartment, you dont want a 10 yr old place if there are a lot of new ones springing up in your area that will be newer and better competition when it comes time to sell
what is the average rental vacancy in the area? while rental yeild might not be the crucial factor, the rent covers your holding costs so no tenant makes it expensive
what kind of tenant are you looking for? as an investor you dont want the lowest priced housing as it can attract people who simply cant afford it but have no real choices, but you dont want the most expensive in the area either as they are the first to go vacant in bad times. Its much harder to rent a $1000pw property than it is to rent a $400pw one.
If you are investing in an area a considerable distance from your home, will you go inspect the properties and the market conditions in that area? Buying a property from another state is risky indeed and not something I would suggest for a first time investor.
who is going to manage the property? this is important anyway, but even more critical if your property is a fair distance from your normal residence. Things go wrong, and its not always something your agent can easily solve. Some things you as the owner need to inspect and review.
You need an agent that you trust, that knows what you want and will work with you. That will solve urgent problems urgently, that will ring you and discuss anything that needs to be discussed, but that will make decisions if necessary without bothering you every 5 seconds either.
I would never invest in another state with an agent I had no knowledge of.
Most important thing in property investment is to make sure the numbers work for you. Make sure that your cash flow works - that you have enough reserves to make the repayments and get through the times when you have vacancies or damage or tennant issues. If you 'have' to sell - that is when you lose money. If you can tough out any downturn, you will usually make money from property.
2nd most important thing - do the research. Buy well and you will make money. Buy poorly and you will not.
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