When purchasing an investment property hubby and I did the opposite to most people. We bought our investment property first and then our family home second. Our investment was two little cottages on the one title in a quaint country town in Australia. It was the first property we ever purchased and these little cuties turned out to give us a wonderful return and have ticked along nicely. The town we invested in had a shortfall of rental properties so just through sheer luck – we’ve never really been out of pocket.
It doesn’t matter whether you have your eye on a unit by the sea or your dream home in a flash area in the city, buying an investment property is different from buying a home. The decision will be a much more logical one based upon factual information rather than emotions.
Here are six hot tips to get you started when considering purchasing an investment property
Location
The location of an investment property is extremely important. The best investment properties are those that offer renters lots of conveniences like public transport, medical services and easy commutes to major business centres. You will want to attract renters with a good income so easy travel to employment areas is essential. For this reasons property close to city areas is considered a good investment. Other high employment hot spots, like mining towns for instance, are also a good bet.
The neighbourhood
Once you have decided on a general location, the next thing to look for is a nice neighbourhood. Look for a property in an aesthetically pleasing street. Make sure your investment property is a good fit for the neighbourhood. Don’t buy a modern brick flat in a neighbourhood full of charming cottages for instance. Look for a neighbourhood that is clean and well kept.
Can you add value?
Another good thing to look for is the property that has opportunities to add value. Perhaps you can carry out some simple renovations to the kitchen and bathroom to add loads of value. A coat of paint and some new floor coverings may also increase the potential rent you can get for the property. There is a growing trend for outdoor living so check out the yard and see if you can carry out some excavations to create an outdoor living space. Don’t be daunted by this possibility. Check out construction machinery at hyundai-ce.com.au/ and talk to outdoor landscaping experts for advice.
Consider low density
Try and find a property in a lower density area if you can afford it. A property in a low density area will be more attractive to renters and will bring in a better return on rent. It will also be beat its high density opponent for resale value. A cottage will be more desirable than a flat in a huge apartment block for instance.
Beware body corporate fees
Before buying an investment property in an apartment block, do your research. The high rise may offer lots of benefits like a pool and in-house gym, but how hefty are the body corporate fees? High fees can kill cash flow, so be careful.
What to look for in apartments
Many renters don’t want a ground floor apartment due to security concerns. Equally they probably don’t want to be too high up as it’s a hassle to climb stairs. Look for an apartment with a nice view. Balconies are highly coveted by most tenants. Car parking is a big consideration for most renters so make sure your apartment has adequate secure parking arrangements. Ensure the apartment is in good condition or is easily repairable. Be careful of rising damp as this is a real turnoff to tenants.