Apartment hunting can be a fun experience when you’re looking to start property investing. It’s a chance for you to not only find an apartment that suits your own budget and aesthetic, but to put yourself in the shoes of a renter and choose an apartment based on the investment opportunities it will then offer you.
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When attending inspections and open days, it’s helpful to keep these 7 tips in mind before making a final decision.
What are you looking for in a property? Ask yourself this question, but more importantly, ask if tenants would find the unit you are looking to invest in appealing. Start your investment journey by conducting research both online and by asking colleagues, friends and family what they value in an apartment. Maybe you should look for properties with an abundance of light, wooden floorboards or gas stoves? This research can help you build a list of what prospective renters look for in an apartment.
Investment property location
Location is integral to property investment and can determine the success of the property in the rental market. Investing in a unit that has easy access to amenities such as shops, schools, parks and public transport can help attract tenants and boost the investment value. Public transport is particularly critical as many renters will not own their own vehicle and so being able to travel easily is often a crucial feature.
What’s the price?
Whilst many properties advertise a selling price, to make sure that you get the best price for your investment it is wise to get an independent property evaluation done. This ensures that you are getting an unbiased price evaluation, thus reducing your risk of being ripped off and potentially enabling you to negotiate the price lower if your evaluation shows a significant discrepancy. Another tip is to also research the average price of other apartments located close to the one you are interested in, to check that the buying price aligns with the area’s property market.
Buying off the plan?
When investing in a new apartment building, it can be a good idea to carry out background research into the developer and their previous projects. If you feel that they are unreliable or feel unsure about the quality of their work, you might even consider going and asking current occupiers of these buildings if they are happy with the property’s condition, to get a first hand perspective.
Buying an existing property?
When attending an inspection it’s a good idea to be mindful of the traffic of tenants in and out of the building. As an investor you should be wary if the unit you are interested in is located in a building that has many vacant rental spaces, as for an investment property to be successful you need tenants. Be sure to research the rental yields for the units in this building and how long they have been listed.
Check the layout
Storage can be a deal breaker when it comes to deciding on where to live. As an investor it’s crucial that you put the needs of your potential tenant first, and cater for what they want, thus making sure that your investment apartment has appropriate storage space is important. When looking at apartments keep this in mind or be open to carrying out renovations to make the layout of your investment property more appealing and practical for renters.
Carry out inspections
When considering an investment property it’s important that you carry out condition inspections before finalising on the sale. During open inspections take the time to go through the apartment slowly, taking photos of scratches or scuffling, turning on water faucets and checking water pressure as well as making sure that all electrical outlets and switches are working. It may also be a good idea to ask for a copy of the apartment’s pest inspection report or ask if you can get one done independently.
Lookout for urban gentrification
Looking at gentrification trends in the area you are buying in can help ensure that you as the investor choose an apartment in an area that is in high demand and will therefore always be tenanted. It is also important to look at how many similar rentals are already in the area, whilst this can mean that there are many renters interested in the area, it can also potentially reduce your chances of tenancy whilst also decreasing your property’s capital appreciation when it comes to selling it.