Tips From Expert To Enhance Capital Growth And Yields 

Shakira
Post : November 18, 2022

Whatever property you purchase must have a connection with your mind and heart. But whatever decision you make must have more financial than emotional impact. Unfortunately, new buyers become too excited about the deal, and they give in to their emotional decisions. Before making a property-related decision, you must understand medium property prices, rental yields, and capital growth. 

The same applies to the rule – doing something is better than doing nothing. While it’s true, you shouldn’t mindlessly purchase an overpriced property, given that it’s good to do something than do nothing. But that doesn’t apply to property market decisions. This guide will share some of the best tips to help you maximise capital growth. Let’s dive in! 

What is capital growth?

Capital growth often referred to as return on investment or capital appreciation, is an important factor when it comes to purchasing a property. In simple terms, capital growth is a property that increases in value over time. Capital growth is attractive to many property investors for a number of reasons. 

Smart investors consider a few points to maximise capital growth and yields in their investments. If you need to achieve capital growth, then take into account the 10 tips we have shared below that come from a property expert:

Do your own research

Doing your own research is important before making a big decision. Since property prices keep rising each day, you must try to get an idea of a few things. To get an idea about property prices in your area, the pitfalls, things that add value, how to get properties at a much lower rate than the market value, and to know which types move faster, you must look at as many properties as possible.

Set out your budget

It is important to know your budget before investing in purchasing a property. Set out a clear budget by taking into consideration of the following costs:

  • Purchase price
  • Legal costs
  • Stamp duty
  • Mortgage insurance (if needed)
  • Extra funds needed for renovations

Once you have a better idea of what it may cost to purchase a property, you may arrange the money or start applying for a loan. 

Work on what works best for you

One simple thing could work better than a hundred complicated ones. We are all good at something, so it is ideal to work out what you are good at. Once you find your strategy, make sure to stick to it. Though you need to be aware of various opportunities and often seek advice, never let yourself get distracted.

Buy properties that are better than the lot

Certain features in an investment property make it more competitive. Focus on particular features that set a property apart from the rest. When researching for properties, there are a few physical factors that you need to focus on features such as: 

  • Off-street parking
  • Good place positioning
  • Ideal sized bedrooms
  • Good natural lighting
  • Garaging
  • A unique factor that makes the property stand out from the rest in the street. 

Considering these factors before you buy a property will ensure that the value and desirability of the property grow with time. 

The Perfect Location

Some areas are considered to have more growth potential than the rest. These desirable locations are always in high demand. Hunt for these properties that come with easy access to public transport, close proximity to hospitals, good schools, shopping precincts, and parks. Properties in such locations have a greater chance of growing in value. 

Find an experienced property manager

An experienced property manager will help you achieve the greatest investment rental yield. They will also ensure that the rent rises with the market in sync. A specialised property manager will work proactively with investors and suggest improvements that will help with a property's long-term capital growth and rentability. 

Unfortunately, many self-managed property owners do not increase rent returns for fear of losing tenants and having their property remain vacant for a long time. This can be avoided by hiring a well-experienced property manager who will also remain an investor's ally in the long term. 

Choose a good mortgage broker

You will want a good broker if you are an investor who aims to build a portfolio as early as possible. You can spend more time looking out for investment opportunities if you have a broker who will be able to do all the loan legwork for you.

Renovate

Renovation is another great strategy to maximise capital growth. Purchase properties for competitive prices in good areas that may need renovation. Then you can update their features to achieve a high rental yield. 

Invest in a Valuation

Never rely on a real estate agent's appraisal when investing in a property. An appraisal is not a valuation. It is only a market indicator that is based on comparable sales. A valuation is an improvement to the property and an assessment of the land value.  Investing in a valuation before purchasing a property will prevent you from overpaying.

Conclusion

Investing in a property means that the ultimate goal is to increase wealth in the long term and secure your financial future. You need to understand that property investment does not necessarily aim to deliver positive results. 

In order to avoid losses and gain positive returns on all the investments you make on properties, you need to make sure to go through each of the tips mentioned in this guide from a property expert to maximise capital growth and yields. If in case you need Islamic home loans, you know where to look for! 

 

 

 

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