Canberra is Australia’s capital and the largest inland city in the country. People generally look for investment options that can increase their wealth manifold in places like Canberra, as it holds great potential.

If you’re looking to make a significant profit on your investment or generate an income monthly, investment in property is a good option.  For people who want to get higher returns on their investments through monthly rentals or in a lump sum.

If you plan to put your money in investment property Canberra, these are five things you need to consider.


1. Is Real Estate Investment Suitable for You?

Is Real Estate Investment Suitable for You?

As per recent data, the total population of Canberra is around 196,037. Male constitute 49.2% of the total population, while females constitute 50.8% of the total population.

Real estate investment comes with risks, but chances of good profits in this industry are also immense.

Before buying an investment property, it is vital to consider factors like securing a mortgage, making a budget for operational costs, finding a reliable tenant who will pay rent on time, and securing a maintenance fund.

As per recent data, Canberra’s residential property price index is around 163.1, and there has been a 25.2% rise in the prices over the years. So in simple words, buying an investment property in Canberra can be a good decision if real estate prices continue to rise in the near future.

2. Your Financial Situation

As per recent data, the median household weekly income in Canberra is around $2,087. Therefore, when buying an investment property, you need to determine whether your income is enough to secure the mortgage necessary to purchase the investment property in Canberra. Here are some questions you need to ask yourself.

  • Do you have a high debt-to-income ratio?
  • How much monthly instalment can you afford?

If your debt-to-income ratio is below 32%, most mortgage lenders will be happy to provide you with a mortgage loan. However, an investment property in Canberra does not qualify for mortgage insurance, so you need to make a higher down payment for the loan.

3. Property Management

Property Management

As per recent data, the total number of dwellings in Canberra is around 82,693. Property management is a major concern as it can significantly drain out your savings.

It is, therefore, important to consider property management factors when buying any kind of real estate. When you are living in a house, you don’t need unique visits to find out issues with the drainage, plumbing, or any cases of breakage or damage that need immediate repairs.

When buying an investment property, ask yourself whether you have enough time and money for property management. You need to deal with the daily management of the property during the initial period, which includes finding and vetting potential clients and handling maintenance issues that arise.

4. Location

Canberra has seven districts, and each district is divided between eight to 25 suburbs. However, the average number of suburbs in districts is around 18.

As a result, investment property prices vary, and expect the prices to be higher in the best Canberra neighbourhoods like Forrest, Hawker, Red Hill, Amaroo, Braddon, Barton, Lyons, and many more.

You need to search for investment properties in the best neighbourhoods while considering the budgetary limits for the purchase.

5. Follow the 1% Rule

Follow the 1% Rule

Investment experts mention you should always apply the 1% rule when buying an investment property. The 1% rule says the monthly rent earned from the investment property should not be less than 1% of the property price.

To sum up, these are a few things to consider when buying investment property in Canberra.

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