Rentals are now becoming scarce in Melbourne and with vacancy rates and home loan rates at a low and some free time around the corner some of us are turning our hand to purchasing the rental fixer-upper. If you can look past the shaggy carpet and the mission brown skirting boards to visualise polished floorboards and semi-gloss whisper white finished skirting boards, a project like this may be an attractive investment.

Property prices are still rising, making it unaffordable for some to enter the property market which leaves them either in the rental market or negotiating with Mum and Dad to turn the study back into their bedroom. There are many renters out there looking for the right property to call home.

Investing in a rental property requires a strategy and it’s important to know the difference between a house that needs some cosmetic work to one that should be demolished. It’s worth engaging in a professional building inspection report so you can consider the maintenance costs required before making an offer.

According to realestate.com.au the current rental yield in Mornington is 2.9% for houses and units 3.6%. Your investment property yield is an important factor and measurement to compare to other investment asset classes. Investors will want to measure the investment performance against others to compare the value. The property cost and expenses also need to be put into the equation.

Purchasing, maintaining and managing a rental property can be a time-consuming task; so who can we call on for help?

Real estate agents – An experienced real estate agent will know the area and what’s on the market

Mortgage Broker – Make sure you have a loan that suits your needs. Brokers have access to a number of different institutions and can cater to your personal requirements. Their experience and education is of no cost to you as the lender pays them for administering the loan and they work without the big overheads of many banks

• You may be a DIY expert and Bunnings is a great form of inspiration but there are some jobs best left to professional trades people such as electricians and plumbers

Conveyancer – You’ll need a conveyancer to make sure the transfer of the property goes through smoothly and legally

Property manager – Legislative requirements are difficult to keep up with and a property manager can take that responsibility, source and screen potential tenants, deal with late payments, damages or any maintenance required all for a management fee anything in-between 4-16% and nominated letting fees.

Financial Planner – Investment strategies and the risk an individual is comfortable with is an integral part of the role of a financial planner. Property has been a popular asset class and considering your personal financial situation can assist in making a decision if an investment property will meet your expected return

An investment property should be securing your financial future by providing income and capital growth. Choosing the right property at the right price by understanding the market and making it attractive to renters can add value to your investment portfolio and create long term security. Remember this is a business decision, you’re buying a house and providing someone else a home, most important of all, you’re building EQUITY.