Property extras that make a difference for investors
If you’re a first-time property investor it’s important to remember that buying a home to help build wealth is different than buying to occupy.
While the broad principles still apply (e.g. location, quality of workmanship and a price that works within the budget), investors consider different factors up front that make a property more, or less, appealing.
If you’re a new property investor, you’ll want to look at the following:
Size and layout
Properties with decent sized blocks and premium floor space are typically valued more highly, and weather well as an investment. The most valuable asset you purchase when buying property is land – so make sure you’re acquiring a reasonable slice of it in an area destined to grow in demand (making that land all the more valuable).
You should also consider the floor plan and liveability of the property.
Is it well designed to accommodate modern lifestyles? Does it have a sense of space and does the floor plan flow well?
Newer properties are more likely to meet these criteria, as some older homes have quirky, dated layouts that aren’t as compatible with today’s contemporary life.
Read more: Should I build new or buy established?
Bedrooms and bathrooms
Smaller homes can be challenging from an investment perspective, as their buying audience is limited. Investors often prefer larger homes with at least three bedrooms to accommodate a family, or multiple inhabitants with flexible needs.
Homes with more bedrooms produce better rental returns. Each bedroom commands more rental dollars, so investing in a home with three to four bedrooms offers flexibility to both growing families and individuals alike.
Of course, the more bedrooms a home has, the more bathrooms it will likely need. So, if you’re eying a property with four bedrooms, look to see if it has two bathrooms or an ensuite to support those extra bodies. Tenants and future buyers will love those options.
Not sure where to start? Walk through the steps of buying a new house in Melbourne.
If your home ticks all the boxes, but the kitchen is lacking, tread carefully.
Kitchens (along with bathrooms) are the hottest zone in a home and can make or break a future tenancy or resale.
Today’s living trends lend themselves to open plan living. People are demanding modern kitchens with sterling accessories that form the central hub of the home. They want room to work and gather as a family, with friends or for general entertaining. Small or pokey kitchens or where quality has been skimped on should be avoided.
Fixtures, fittings and finishes
Investment properties should be built to last, and more importantly they should boast high quality fixtures, fittings and finishes throughout – from bench tops to flooring, to cabinets and everything in between.
Classic and timeless materials are ideal, as they’re less likely to date and need to be replaced over time. The better the quality, the more you’ll save on maintenance and renovation expenses. Look for properties that come with modern conveniences to help you avoid having to install these features before you lease it out.
You want fresh, clean and ready to rent.
Location growth prospects
When you buy to occupy, you’re usually concerned with the immediate state of a location.
Amenities still matter – does the property have access to essential services, schools, transport, retail, green spaces? But when you buy to invest, you’re even more concerned with how that location is likely to evolve and grow.
Look closely at plans for development and infrastructure in the region and understand demographics of the area – now and projected. Is population growth anticipated? From which type of groups and communities (e.g. migrants, families)? Also look at the performance history of property in the area, including vacancy rates, current yields, rental growth and highest demand property types.
Location is king. Learn how to choose the right suburb.
Room for value adding
While you hope to get a perfect investment straight away, sometimes you need to work on a property over time to increase its value (a valid strategic approach).
Take note of properties where you’re likely to have freedom for substantive renovations in the future, such as adding an extra room, or even an extra storey. Also look for improvement opportunities such as blocks that can be landscaped, and interiors that can be updated over the long term as trends change.