Why? Because it enables investors to develop equity in an asset that can be leveraged over time. It allows investors to keep up with repayments and deliver rental income, and in many cases enables them to accumulate wealth over time as the property value increases.

However, successful property investment is more about good management than good luck. To help you maximize the potential of your investment property, we have created this guide.

We hope you find it useful.

What is Your Property Investment Strategy?

Before we get into the details, let's define what a property investment is. It is a property purchased to make a return on investment, via rental income or future resale, or both.

There are several different types of investment properties and understanding your options is a good first step:

• Commercial property investment: covers any type of property that a business operation would use, whether it is an office, retail, or industrial space.

• Mixed-use: a property that can be used for both residential and commercial purposes.

• Residential property: the most common type within Houston, including single-family homes, apartments, townhouses, or other residential structures.

What are My Different Property Investment Strategy Options?

When it comes to real estate investing, you’ll often have two conflicting strategies; invest for capital growth or positive cash flow.

• Capital growth: the idea behind this strategy is to purchase a property with high growth potential, resulting in a sizable profit when sold down the track. These properties typically have a higher purchase price and may have negative cash flow initially.

• Positive cash flow: an investment property that earns more in rental income each year than it costs in loan repayments and other expenses associated with ownership.

What are the Different Ways to Invest in Property?

Depending on your preferences and goals, there are various ways to invest in property:

• Buying an apartment: Generally cheaper to purchase than a house, apartments may have lower ongoing maintenance costs but come with strata management fees.

• Buying a house: Houses traditionally have greater capital growth potential than apartments but may require more maintenance and have higher upfront costs.

• Buying a new property: New properties often come with lower maintenance costs and tax benefits such as full depreciation.

• Renovations and house flipping: Investors purchase properties to renovate and sell for a profit.

• Real estate investment trusts: Investment trusts combine funds from multiple people and invest in a range of different assets.

• Buying an investment property with your superannuation: Possible but comes with strict regulations and additional fees.

How to Research the Property Market for Your Investment

Understanding supply and demand, economic and demographic trends, as well as planned infrastructure and developments for the areas you are looking to invest in, can help you make smarter investment decisions.

Consulting local real estate agents, property developers, and property managers for insights into the local market is also beneficial.

What Location Features Should Property Investors Look For?

Location is a key feature of property investment success. Consider factors such as proximity to public transport, amenities, school catchment areas, safety, neighborhood growth, and historical charm when looking for property investment opportunities.

How to Determine the Right Rental Price for Your Property

Setting the property's rental rate is crucial for maximizing income and attracting high-quality tenants. Consultation with local property managers and research on median rental prices in the area can help determine the right rent for your property.

Investment Property Tax Deductions

Property investors can claim various tax deductions, including property management fees, interest on investment loans, maintenance costs, and more. Consulting with an accountant is recommended to ensure all eligible deductions are claimed.

How a Property Manager Can Add Value to Your Investment

Property managers play a critical role in ensuring the success of your investment. They help find quality tenants, manage day-to-day issues, maximize rental yields, and provide valuable insights into the local market.

How to Review Your Property Investment’s Performance

Regularly reviewing your property investment’s performance can help identify areas for improvement and maximize returns. Consider factors such as rental rates, market conditions, property conditions, investment loan terms, and tax deductions.

Benefits of Using a Property Manager

Working with a high-performing property manager offers benefits such as finding better quality tenants, managing day-to-day issues, ensuring rent is paid on time, staying knowledgeable about the property market, and achieving better rental yields.

Annual Strategy Session and Property Appraisal

An annual strategy session with a property manager can provide insights into maximizing your investment's performance, including adjusting rental rates, making property improvements, and claiming tax deductions effectively.

Investing in property can be a rewarding endeavor. For personalized guidance on property investment success in Houston, connect with a local Concrete Goals property manager today.