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Buying investment property: What to look out for?

Last updated: 10. June 2020 | Reading time: 1 minute

The property’s risk profile should be assessed comprehensively as part of a ‘due diligence’ process; in other words, simply looking at the gross yield is certainly not sufficient.

Key audit steps could include, for example:

Location analysis: SWOT analysis with an assessment of future development opportunities
Assessment of rental income: is this in line with market rates, or is there an over- or under-rent to be taken into account?
Quality of the property: general build quality, defects and/or damage, maintenance backlog, assessment of management costs
Quality of the tenant mix: assessment of rental income security
Legal assessment: review of contractual arrangements
Tax assessment: Comprehensive review with a presentation of exit strategies

The information gathered is often presented in various scenarios: base, worst-case and best-case scenarios.

Markus Riedel

Managing Partner

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