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Are you buying for tenants?
Investing in property requires a different approach to buying a home to live in. It is important to focus on buying with your head, not your heart.
Blogger: Bob Korver, owner, Mortgage Choice Eight Mile Plains
With interest rates sitting at record lows and well-located properties continuing to deliver solid returns, now is the perfect time for potential investors to look at their options.
Of course, if you are considering purchasing your first investment property in the not-too-distant future, it is important to do your due diligence and make sure all decisions are made with your head and not your heart.
Searching for the perfect investment property calls for quite a different approach compared with finding your dream home.
When choosing your dream home, for example, you might look at how the house will best accommodate you and/or your family by looking at the number of bedrooms or the house’s proximity to your place of work, schools, other family and friends, etc.
When searching for an investment property, you need to think less about your own property preferences and more about your potential tenants’ wants and needs. Think about the kind of tenant/s you want to attract to your investment property and use this to help you home in on the type of property and property features that would be desirable for these potential tenants.
Keep in mind that tenants can be very picky about what they are getting in return for their rent, so look at your potential investment property with an objective eye and consider what it offers that other properties may lack.
Location is a key driver when selecting an investment property, so aim for the best location you can afford. A property offering good transport links and proximity to outlets such as shops, restaurants, parks, schools and even hospitals is ideal.
Ensure that you research locations carefully, taking into consideration all of the important factors including, but not limited to, population growth, tenant demand, local price growth, developments planned for the area in the coming years, etc.
Other ‘must-have’ investment property features include:
- Security: Is it a safe, quiet street with good lighting and/or a property with a home security system? In the same way you want to feel safe in your home, you want your tenants to feel safe in theirs.
- Parking: Off-street or undercover parking could add value to your property and attract a wider range of tenants.
- Tenant appeal: In order to maximise your rental return, look for properties that will appeal to your ideal tenant. Why not give the house a little more aesthetic appeal with a fresh coat of paint, or new handles on the kitchen cupboards – every little bit helps!
- Storage: Ample storage is a plus for tenants. The more storage you have, the longer your tenants will be likely to stay. Further, plenty of storage facilities could also help to ensure that the property remains well kept.
- Low maintenance: Stick to properties that can be easily and cheaply maintained on the tenant’s behalf, as they are more likely to prefer low-maintenance homes that will not require a significant investment of their time for upkeep.
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