4 Ways To Generate Strong EQUITY in Your Investment Property

In the Aussie Property investment world, it’s safe to say that creating equity is one of the key elements in success.

Not just because it’s great to know that your property has increased in value, but also because it puts you in a strong position to continue growing your investment portfolio, through leveraging that equity into making more purchases.

So, today’s all about diving deep into equity gain from a property perspective, ensuring you have the tools, knowledge and confidence to foster equity growth in your own investment property.

Stick around for our 4 top tips for generating equity in your investment property.

Whether you’re looking to get started on your journey, or you’re a seasoned investor hoping to grow your portfolio, these tips will be useful!

First of all, before we get started, what do we mean by EQUITY?

Well, when it comes to property investment, your main goal will more than likely be financial gain – and equity is just this.

As explained by our dear friends at the Cambridge Dictionary, the formal definition of equity is all about the money value of a property after debts have subtracted.

Or more simply, how much money you’ve made on a property.

When it comes to property investment, building equity over the long term is key to growing a solid, quality portfolio, and achieving your idea of financial freedom.

So, now for some tips for growing equity in your investment property:

1. Optimise Location

   If you’ve been on the Propell bandwagon for a while now, you’ll almost certainly know all about how much we love LOCATION when looking for an investment property. In fact you can check out the blog on finding the ideal location to invest HERE!

   Back to the point though – it’s not really about thinking, ‘Wow, this is a lovely street’, or ‘yep, I can picture myself living here’…

   Instead, it’s about looking at what really makes a location a good option from an investment perspective.

   Properties in locations that have a high demand, and low supply of new houses, alongside favourable macroeconomic factors, such as unemployment rates and migration patterns are what really work.

   As demand increases in locations such as Western Australia and South-East Queensland, as migration numbers continue to climb, and demand for property continues to outweigh supply, there will continue to become incredible opportunities for investors wanting to buy in the right LOCATION.

   Alongside this, a strong location also has quality infrastructure surrounding. Good roads, public transport, parks, sporting facilities, shopping centres and hospitals go a long way towards drawing in demand for property rentals.

   Quality location and equity goes hand-in-hand, because it is all about identifying where the long term value – and therefore growth lies!

2. Look for Double Story Homes in Owner Occupier Areas

   Looking a little deeper into the relationship between location and equity growth, we find ourselves looking at specific types of areas.

   In an owner-occupier area, people that own the properties actually live in them. This makes for a more desirable area to live, as well as making it actually feel more like a genuine community.

   This paired with the livability of 2 storey homes makes for a great place to call home.

   Investing in this kind of area allows you to piggyback off this perceived value, organically and naturally improving the value of your property. Even though you may not be building a double story place, this kind of investment helps ensure that you are creating equity in your property before tenants have even moved in.

3. Infill Estates

   Another type of area that has amazing potential from an equity point of view is an infill estate.

   To put it simply, an infill area is a small allotment of property, typically around 10-20 lots, that forms an estate in an existing area. These are great for a couple of reasons:

   • Lower demand and awareness for the property (they’re normally wholesale).
   • Proximity to existing infrastructure and amenities.

With this, comes that idea of generating equity, both from lower perceived value, prior to investing, and the ability to harness general demand for the location.

4. Full Turnkey

   When it comes to a finished investment property, you ALWAYS want to make sure that things are completed FULL turnkey.

   Why? Well, it can be the difference between having your tenants move in straight away or spending an extra $75K making the house liveable.

   There’s a bit of a Caveat Emptor – or buyer beware when it comes to identifying a full turnkey property. Essentially, it’s just a fancy way of saying the property is completely ready to be lived in. The thing is, many building companies say that they offer turnkey properties, but fail to actually complete things to a liveable, desirable standard…

   So, we’ve got a list for you, just to see all of the things that will ensure that your investment property is full turnkey:

   • Internal painting
   • Driveways
   • Air Conditioning
   • Built-in Kitchen Appliances (Oven, Stove, Dishwasher)
   • Blinds
   • Landscaping
   • Window Locks
   • Fencing
   • Carpet

   The investment in these types of features takes things to the next level, providing great value to your investment, helping increase that equity in the property.

As you can see, creating equity in your investment property isn’t always about doing things that are tangibly creating value. Instead, it’s about a combination of identifying the right conditions, and building quality in your investment. With this recipe, and by keeping these 4 factors in mind, it will go a long way to helping you turn an investment into a quality, long term, equity generating home.

Interested in learning more about getting started on your property investment journey? Want to chat more about building your tailored Propell Property Plan?

We’re here to help – give us a call on 1300 776 735, or send us an enquiry HERE!