Choosing a property wisely can pay dividends in the long run – providing a trouble free, low maintenance second income. However, there are many factors which you should always consider to avoid your investment becoming an expensive mistake. When you look to make such a significant purchase, consider the following factors:
Getting the right location is one of the most important factors to consider with any property. A key location, in demand often drives increased equity values in the property through capital gain. Furthermore a key location can also help to attract better quality tenants too, who are generally willing to pay a little more to live in a secure, well connected area.
Ideally, it’s worth considering a property that’s as near to good transportation links, amenities and schools as you can afford. It’ll also help with resale values in the long run.
Don’t forget to think about the pro’s and cons of different location factors – such as being near a busy international airport. It might be ideal for business owners, but not so ideal for families with children. Thinking about who your target market actually is will help you settle on the right area for your market.
Don’t forget that public facilities available nearby, such as hospitals, medical centres, libraries and even post offices are great features to help ensure your property remains easy to market. Close proximity to green spaces such as parks shouldn’t be overlooked at excellent points to consider (especially for people who are fitness conscious) when you come to put your property on the rental market.
THE PROPERTY ITSELF
Getting the right property to fit the right tenant profile is a key consideration. Before you dive into to buy, look at the area and understand a little of its demographics – who actually lives in the area. This is more important that it might initially seem. An example of it is an area that has a strong older demographic, it is more than likely that someone from outside that demographic won’t consider renting your property. If you were aiming to rent in this area, then a property that has long winding staircases probably won’t suit!
Ensure you look at the property for any potential renovations or improvements that might need to be done. It’s always worth getting a professional to check the building for things like rot, termites, leaks, electrical faults, heating issues. Get some advice on how much these repairs might cost before signing on the dotted line.
A good property is going to be one that has minimal maintenance issues. You might have to do some work yourself, but to increase your returns you want to keep costs down. If the place has recently been rewired or had new appliances fitted – then that would be a big bonus. Also, consider the potential Body Corporate fees you may incur from an apartment. You don’t want your first investment property to be a major renovation project.
Looking at the market will help you decide what makes a good investment property. If you really wanted a good idea, you could even attend a viewing as a tenant to see how those properties are presented. This will give you a much better idea of what makes an attractive rental property.
We at Anne Street Partners can help you avoid making potentially expensive mistakes in any of these areas – talk to us about how to get your foot onto the property ladder.