The perfect investment property may seem like a fantasy, but it’s closer to reality than you might think. That is, provided you have the forward-thinking mindset to identify the most important characteristics in an investment property.
While you might be tempted to follow the template on what you are looking for in your dream home, it’s a different story when you’re on the hunt for your perfect investment property. The best thing you can do is take into account the various drawcards that ultimately have the most appeal across the market for tenants.
Not sure where to begin? Take on board these tips to find your perfect investment property.
The Investment Mindset
The fundamental starting point when it comes to investment properties is to think about your financial goals.
Are you looking to prioritise a higher yield in the name of securing a property with lower capital growth prospects, or would you prefer to target capital appreciation over time? Alternatively, would you favour a mix between the two? Is a new or existing dwelling more likely to help you realise said goals? What sort of traits and features might be viewed as more desirable by tenants?
The key here is to take all of the emotions out of your decision making process. You want to think about things in a logical manner and place an emphasis on the criteria that matter in helping you realise your goals.
It is important to realise that all of our needs are different. This should be your primary consideration when looking at potential investment properties, as you need to be mindful of the fact that each tenant will have different needs.
While it may seem as though you should focus on one target market for tenants, the reality is that you are better served by looking for an investment property that caters to a wider net of tenants. In effect, a property with diversified characteristics.
This is where first-hand knowledge can go a long way. By investing in a property within a location you already know, you may have an understanding of the demographics of that suburb, let alone what tenants appreciate in that area. If you were previously a tenant yourself, all the better, you could even be ahead of the curve in terms of your knowledge.
Features to Look for in an Investment Property
Once you have a general understanding of the mindset required to approach property investing, it’s time to then look at the specific factors that will shape the appeal, and performance of your investment.
Location
By far and away the most important trait is property location. It’s hard not to emphasise how vital the location of a property is when it comes to the quality of that property as an investment.
On this front, you really want to consider what themes are playing out in the area, including price growth, population growth, local amenities and infrastructure, transport links, as well as any development plans for the area.
These are all key qualities that shape the type of tenants that a property may attract.
Safety and Security
While you may be willing to compromise a little in terms of your preferences when it comes to crime in a certain part of town, or even the security features associated with a property, don’t assume your tenants will.
In fact, it’s wise to assume the opposite. Safety and security may very well be the most pressing concern. So whether it’s extra lighting or surveillance, or a property in an area with low crime, you might want to think twice before glossing over this trait.
Parking
Most tenants appreciate the convenience of having off-street or undercover parking. Sure, not everyone owns a car. And even among those who do, they may be happy with just public transport.
But if you want to err on the side of caution, with an investment property that will appeal to the widest range of possible tenants, and also underpin the value of your investment going forward, parking is a requirement.
A Great View
What prospective tenant wouldn’t appreciate a good view? Not only is this one of those features that tends to be a bit of a wow-factor when selling a home, but it also appeals to a wide range of tenants as well. That means you can often add a little bit extra onto the weekly rent.
Storage
Perhaps one of the most underrated features in terms of desirable traits that appeal with tenants, storage should not be overlooked. The more storage your investment property has, the more it offers tenants in terms of flexibility, convenience, and practicality.
We all have belongings that we sometimes hold onto for too long, so it’s wise to assume your tenants will as well. As an added bonus, sufficient storage means your tenants won’t have to shell out for storage off-site.
Low maintenance
Last but certainly not least, there is little that appeals more to investors than a low maintenance property. Not every tenant owns things like a lawn mower, whipper snipper, or other equipment that you might require to tend to a backyard.
This is enough to put certain groups off and limit interest in your investment property, as they know it could be all too much work. Knowing this, you might want to opt for a property that is neat and tidy, even somewhat minimalist, but most of all, easy to maintain.
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