It’s an old cliché, but “position, position, position” is never more true than when selecting an investment property.
The area and style of property in which you chose to invest will determine the type of tenant and level of rent that you will attract.
You must research your target area. You want to know local demand for rentals and whether houses or units are popular.
You’ll also need to decide whether your property investment should be a house or unit. Typically, houses are more expensive but will provide better capital growth because of the land component. They are also popular in areas where young families like to settle.
Units are easier to maintain, reducing ongoing maintenance costs, and attract singles and couples who usually prioritise their lifestyle and love beaches, trendy restaurant strips and city centres.
As your real estate agent, we’ll be happy to run the ruler over some of the most suitable choices that have caught your eye and discuss not only likely rentals but also the type of tenants the property will attract.
Here is a checklist of items to consider when you are seeking out an investment property:
1. Position is essential – City centres, trendy streets, local schools and universities are always popular and command strong rents. It’s also easier to find replacement tenants when occupants move on.
2. Check local amenities – Poor access to public transport, schools, employment opportunities, plus positions on noisy streets or below flight paths, will put off potential tenants and adversely affect rent levels.
3. Does a house or unit make sense? – Real estate investment is all about building wealth, so your choice needs to be decided by the numbers. Capital growth varies depending on what you buy. Houses perform best because they have land, but they’re usually more expensive. Units can be easier to maintain but will come with the overhead of strata costs. Don’t mix your personal preference with dollars and cents. Focus on your bottom line because this is an investment.
4. Listen to the rental market – While money talks so does your target market. The style of property should be based on the demands of tenants who want to live in the area. If your desired property is near a university, then a house with a good number of bedrooms is going to be popular with students. Conversely, singles and couples will gather near and within CBDs, so one- and two-bedroom units usually move quickly. The key here is to understand whether you’re buying a property that is suitable for rent in its area. As your real estate agent, we can advise you on this element of selection.
5. Avoid fixer-uppers – Unless you’re a builder and you’ve found an absolute bargain, you want to avoid spending your investment dollars on repairs or structural modifications. Instead, focus on property with good fixtures in the kitchen and bathrooms. You may need to re-paint, even update a vanity or kitchen bench, but stay away from big-ticket items.