subject: What To Look For In Your Investment Property [print this page] Your investment property requires potentially different features from your home, because profitability and return should be favoured over personal comforts. Appealing to a large tenant market is important, rather than catering to specific tastes. In this article we talk about the things you should look for, or invest in, in your potential investment properties, in order to see the best possible return. The suburb you buy into is also of importance, so see our article on 'What to look for in a suburb'
Ability To Add Value
The ability to add value to a home over time, as your budget grows or interest change, is important. Often buying a cheaper home that you can renovate will prove far more fiscally sensible than a readily renovated home. Being able to add value to a home will also result in extra return when you sell the property. Don't forget to factor in renovating costs, and time spent renovating, when looking at price comparisons.
Sensible Floorplan
One of the hardest things to change about a home is its floorplan, so look for sensible configurations. Tenants will be drawn to a home that 'makes sense'. Whilst it is possible to add bedrooms, bathrooms and more to a home, the existing floorplan generally remains the centre of the home. Something to consider is a home with a study/bedroom, so it can be configured to suit different size families each time.
General Appeal
When purchasing and renovating, look for an investment property that has general appeal rather than catering to your specific tastes. In almost every case it is better to choose neutral colours and classic design, leaving large injections of personality to the tenant. This will also make your home easier to sell in the long run, as buyers will not be put off by design that is far from their tastes, or long out of fashion.
Affordable
An investment property needs to make sound financial sense, more so than your own home which tends to have emotional as well as financial implications. Choose a property that allows you to break even, or make a profit with rental returns and mortgage repayments.
Low Maintenance
Choosing a low maintenance investment property is generally a good idea, unless you are looking to appeal to the high end of the market. Low maintenance gardens not only appeal to a wider range of tenants, they are more likely to be looked after. As most maintenance and repairs are the landlord's responsibility choosing a low maintenance property makes sense.
