If you are in the market to purchase an investment property there are several factors to consider taking the plunge. As most people know I am very passionate about people investing in their futures with rental property ownership, but there are of course several things to consider.
Location. Although it may be tempting to buy the best house in the worst street as the prices are often lower, have a think about the type of tenant you are wanting to attract. What are the neighbours like? How are other properties in the street presented? And of course what schools and amenities are in the area?
Old or new? Both come with their own benefits, in general a newer property will likely give you a higher capital gain, while an older property will give you a higher weekly return. You need to ascertain what your goal is, and how long you are prepared to hold the property for.
Condition of the property. Do-er upper or an already renovated property? If you are purchasing a property where work is required remember there are several minimum standards which are required now for rental properties. Smoke alarms, heating, insulation, ventilation, drainage (all part of the new Healthy Homes Bill). Make sure you know the requirements and factor this into the renovation cost. If the property has already been renovated, then make sure all the work has been consented, this is also covered by tenancy law, and the repercussions of renting unconsented dwellings are severe.
This is just the tip of the iceberg when choosing a rental property, and the best advice I can offer is to consult an expert before you purchase, knowledge is, as always the key to making a good decision.
Operations Manager – Property Management
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