What to look for in an investment property

There are a number of factors to take into consideration when buying an investment property, and these will depend upon your motivation for buying.

You may be after the highest tax deductions you can obtain, in which case you would need to ensure you had a relatively newer home to maximise on depreciation deductions. You might be wanting to invest in an area with great capital growth, or you have outgrown your current property and want to hang onto it when you transition into your next one. Whatever your motivation, there are key things to keep in mind that help attract good quality tenants and maximise your income.

• First and foremost, the overall presentation of the property is extremely important. Good quality tenants want good quality, well presented homes that are neat, clean and tidy. There are plenty of bargains to be had when purchasing, however it is critical that you factor in the costs to tidy up inside and out (does it need painting, new floor coverings, new window treatments? Is the yard presentable or does it need an overhaul with landscaping? Are there any hazards, rubbish/excess items etc). Improving the presentation will improve the rent that can be achieved, along with the quality of tenant that can be obtained. We can assess any prospective purchase for you and advise our thoughts on items that could be carried out to increase return and minimise risk.
• Storage! These days most tenants don't have wardrobes and expect that built in robes will be provided. If you haven't got them, where possible budget to get them. This can be the difference in rent price achieved, and whether your property is let quickly to the best tenant.
• Heating and cooling is highly sought after and quite simply good tenants expect it. If you don't have any, where possible budget for it. Figures show rental properties that do not have adequate insulation and heating and cooling have a much higher rate of turnover, meaning your return can easily be reduced.
• Outdoor entertaining area's. While no where near a necessity, this is a highly desirable feature ensuring excellent tenant inquiry and the best possible tenant, so where possible seek properties with some form of undercover outdoor entertaining area.
• Sheds. Quite simply there is market for both those properties with a shed, and those without, however a shed can attract a higher rental return.
• Location. There are pro's and cons for everywhere! Some locations that are less desirable (such as main roads) attract a higher rate of return as their purchase price is lower, however they may also be difficult to tenant and have lower capital growth over time.
• Swimming pools - whilst highly desirable for some tenants, they also tend to be costly to maintain if the right steps aren't put into place at the commencement of tenancy. Ensure that any property is compliant with pool fence regulations.

Each property purchase needs to be assessed upon its merits, taking into consideration the motivation of the investor.

We love helping investors through the purchase process so if you are considering putting in an offer, or would like a free assessment on a prospective or existing property to see how you can improve your returns please contact us on 8386 1555.