What are some of the things I look out for when recommending an investment property to a client?
What makes some homes "investment grade", while others are not considered in this way?
Here are some criteria that I use:
- Preferably a home that has parking. Parking is not essential, because there will always be tenants without a car who prefer to live where they want to live but without the extra expense for parking. If the property does not have parking, there should be easy street parking, and it should have a bus stop within a couple of minutes' walk, or a train station within 10 a minute walk.
- Preferably not on a main road. Properties on a main road tend to be cheaper, both to purchase and to rent. As above, there'll always be tenants who prefer to pay a but less rent to live where they want to live. A main road is not a deal-breaker, but those properties that are off the main road may be slightly more popular over time.
- A dwelling type that is typical for the area: if units are the predominant property in the area, buy a unit.
- An area with a very low rental vacancy rate: I prefer a 2% rental vacancy rate.
- An area with a proven track record for growth in property prices
- An area within 20km of the CBD
- An area with good transport
- An area close to cafes, shops, schools, entertainment and medical facilities: these are the things that will ensure your investment property continues to be in demand.
- An area with established properties
- If a unit, levies that are not too high
So there you have it: my top tips for buying an investment property. If you need a hand, I am only too happy to help. Give me a ring on 0400 418 448.