How Much Should You Invest In Your Rental Property?

Deciding how much money to invest in a property can depend on your circumstances – how much money you have in your savings, what your borrowing capacity is and what sort of return on investment you want.

Making a choice about how much you want to invest in a rental home is a personal decision.

Investors generally have two schools of thought – either they decide to buy a new property or they will purchase a house or unit to renovate and increase the property’s value.

You will probably not spend the same amount on your investment property as you did when you brought your own home - and it may not even be in the same area.

The important thing is to plan your investment strategically - you want to attract quality tenants and ensure your returns are steady, as this gives you the best chance of long-term investment success.

There is no right or wrong answer - it comes down to how much money and time you want to invest in the house.  It’s a cliche,but the more you put into a property, the more you are likely to get out of it.

The property’s location will also determine how much it costs. If it is situated in a sought-after area then it likely  will be more expensive. But by the same token, if it is a popular area for renters then it is more likely that you will never struggle to find tenants.

On the other hand, buying in a less popular area can have its advantages because you may be able to find a property that is more value for money and could potentially become the place to live in time.

Finding out what your borrowing capacity is could be the first step to discovering how much you should invest in an investment property.

For more information on your situation, talk to a Loan Market mortgage broker today.