A finance broking executive has shared the non-negotiable features of a good property investment, which also contributes to securing finance in the current market.
With competition from investors being subdued lately, now is a good time to buy, but acquiring finance can still be difficult in the current market.
According to Brendan Dixon, managing director of Pure Finance, there are certain attributes of a property that can add to its long-term longevity and increase your lending prospects from banks.
Whether an investor plans to rent out or sell a property, it needs to appeal to its future residents, and by doing so, investors should be thinking like an owner occupier, Mr Dixons aid.
“What you want is a property that isn’t just good for investors but is also good for someone to be able to live in as an owner-occupier,” he said.
“It’s got the attributes to live in that you would want in a property.”
Any owner occupier would want to live near appealing lifestyle factors, so this should also be considered by investors, the broker said, especially if investors wish to avoid a vacant property.
“Make sure it’s close to a city center, public transport, cafes, restaurants, bars, it’s got a lifestyle destination,” Mr Dixon said.
If there is something about the property an investor intends to buy that cannot be found elsewhere in the area, Mr Dixon said doing so is a smart investment move.
“Buying something that’s unique and it’s a finite resource, there’s not many of them, it’s unique to that area is an absolute cracker of a strategy,” he said.
“It’s going to get those passionate buyers going after it, it’s not comparable to a lot of things in the area, so when it goes up for sale, there's going to be good demand for it.”
If there is nothing particularly unique about the property initially, Mr Dixon said adding something unique yourself can work too, but it can work against investors if they try to add something that only the investor themselves will like.
“You can look at an area like Chippendale or Potts Point, there’s a finite resource of property there and you can buy something that can be transformed into a beautiful home that an owner occupier would want,” he said.
“The key with transforming a property is you obviously want to have your influence on it, but you also don’t want it to be so wacky that no one other than you love it.
“That's why they [investors] paint the walls white … the standard things that people want, so keep that in mind.”
To improve your chances of securing finance for a property, Mr Dixon said investors should also be considering property that the banks would desire.
As an example, Mr Dixon looked at the size of property.
“If I’m looking at a property in Potts Point that’s 35 square metres, … there’s only a small handful of lenders that will do that [but] the buyers don’t know that when they’re looking to buy your property in future,” he said.
“So, what they can find is that they turn up to the home open, they love the property, they want to buy it, they ask their bank, the bank says ‘No, we don’t lend on properties that are that small’.
“Some constructive advice there would be, 50 square metres minimum for a unit and strata title if you’re looking at apartments.”