Attention property investors: Here's how to choose your suburb with confidence

3 things you ought to know before deciding where to buy.

Today more than ever, knowing where to buy an investment property requires some serious leg work.

We're talking about online research, face-to-face meetings, working the phones, and even hitting up social media channels. Because the more inside information you obtain about the area you invest in, the greater your peace of mind knowing you have made a smart financial move.

The good news is there is a lot of information available, that is easy to access. The bad news is it can make it harder to know where to start? No problem, here are a few resources and considerations to help you decide where to invest.

Start by tapping into FinancePath's Property Solutions hub. Here you can take the guess work out of choosing your location by arming yourself with information such as:

The current value of a property;
Average rents;
Demographics;
Sales trends in your chosen suburb; and even
What capital growth and rental return you can expect now and in the future.

Then, check out the latest CoreLogic RP Data. For example, May 2016 figures show five of the eight capital cities saw a modest rise in rents over the past 12 months, including Sydney (1.4%), Melbourne (1.7%), Adelaide (0.5%), Hobart (1.1%) and Canberra (2.5%). What's more, Canberra is the only capital city where the annual rental change is currently stronger than it was a year ago.

If you're thinking about renting out your investment property, study up on the demand for rental properties in your area. Investment property market data released on June 30, 2016 suggests there is high demand from people looking to rent houses in Melbourne.

To help firm up your decision, consider these three pointers before buying an investment property.

1.     Know your numbers
To find out what your maximum purchase price for an investment property is, you must first determine what you can afford to repay. Remember, the banks only take 80 per cent of your rental income into account when working out whether you can afford an investment loan, this is to allow for the cost of vacancies and letting fees.

2.      Who is going to buy the property from you?
You may have heard people in business say: 'start with the end in mind'. Well, the same can be said for property. Because at some point you are going to want to either sell your investment property for a profit or want to access equity. This means buying a property that people with cash will make an emotional decision on in the future. Neutral tones, keeping the bathroom and kitchen in good condition and landscaped outdoor areas will all help make it easy for people to see themselves living there. And, in the meantime, you're more likely to attract quality tenants if your property ticks these boxes.

3.     Consider future plans
Sure, no one has a crystal ball, but forward planning and research can point you in the direction of a particular suburb or region worth investing in. For example, many real estate commentators are talking about the west being best for investors. Melbourne's inner west is catching attention with it's close proximity to the CBD and well established public transport services, while the outer western suburbs are also enjoying major development. Airport plans and growing employment opportunities in western Sydney are adding real appeal to investors as well.

Find out more in our free eBook, How to Buy an Investment Property: your step-by-step guide to investing in Australia.