Over the last few weeks we have seen some volatility in the international money markets, which has resulted in many nervous investors turning back to the property market.

When this happens, we find there is a commonly asked question: What should we look for?

When purchasing real estate, investors have two key choices. Generally speaking, these are residential and commercial/industrial.

While residential investment has been the domain of "Mum and Dad investors", increasingly we are seeing institutional investors - ie big corporations and government departments - purchasing large amounts of residential accommodation.

One of the largest in Australia is the Defence Housing Authority, which buys property across the country for Defence personnel.

Many investors miss out on the opportunity that commercial and industrial real estate offers. This sector of the market often represents a higher return, as usually the tenants will pay a higher rental compared to the value of the property, in addition to any outgoings such as rates.

The commercial and industrial sector runs at a different pace to residential real estate, as often when residential is slowing, commercial and industrial is just starting to stir.

It is seen as a riskier section of the market, as it is not uncommon to have a commercial building vacant for long periods of time while a suitable tenant is found.

This shortage of cashflow may balance out the benefits of any higher return. Again, maintenance, location and fit-out are all determinants of a building's return for the budding investor.

Residential real estate is traditionally safe, as everyone needs a place to stay. Often the returns are a little lower; however, generally speaking, there are rarely ever long periods of vacancy.

Many investors may choose residential purely on the capital gain potential, as often the property's value may grow faster than return rates, which is not always the case in commercial.

Commercial often requires a larger amount of surplus cash, as residential properties start at more affordable levels.

The perceived shortage of residential real estate indicates it is a great time to purchase as there are plenty of good-quality tenants available. With low levels of supply, rents are likely to be forced up, thus impacting on the overall prices in the market.

My tip for investing is to always look for the best-value property today. Search for good locations and look for properties that you can see have potential for improvement.

Looking forward to seeing you out and about at the open homes over the coming weekends. “Happy Investing!”