You’ve decided that the time’s right to purchase an investment property and you’re keen to get the ball rolling immediately. That’s fabulous, however, a great deal of research and thought should be undertaken prior to this to ensure your investment works for you in the manner you intend it to.
One of the key things you need to consider is what kind of tenant you want to attract, and something that will have a great bearing on this is the location of your property.
This refers not only to the location of the suburb itself but also to the position of your property in relation to key amenities. Things that are important to tenants may include proximity to shopping precincts, public transport and freeways, schools and other educational facilities, as well as parkland and open green spaces.
What does this actually mean? There are some public primary and secondary schools that can only be attended by those who live within a certain boundary or zone. If you own an investment property within these areas, there is a high chance that it may be tenanted by a family with school-age children, potentially making them great long-term renters. Some of the most sought-after secondary schools in the eastern suburbs with strict zoning include Camberwell. Balwyn, Vermont, Ringwood, Box Hill, Mount Waverley, Glen Waverley and East Doncaster. Something to consider however is that if you’re looking to purchase in these areas, you may be paying a premium price to do so.
The type of property you purchase within the inner city may dictate the tenants you attract. An apartment will potentially appeal to students who attend a nearby university; it may also be attractive to young professionals who want to be close to work and the lifestyle on offer in the CBD, but don’t want the maintenance of a yard. If it’s a home with multiple bedrooms and living areas it may be attractive to a group of friends wanting to live together. A consideration here, however, should be that if there are a number of different people on the lease, it can be hard to keep track of people moving in and out of the property, and rooms may be sub-let by one of the lease holders. This effectively dilutes the control you have over who lives in the property and may put it at risk. If this is the case, ensure that your rental agency is doing regular inspections and taking a lot of photos, and where at all possible, attend the inspections with them for peace of mind.
Again, the type of property will dictate who applies for it, but it’s definitely more likely that you’ll attract a family in a suburban location than in an inner city one, especially if your home is generously accommodated, has a decent yard, or alternatively is close to parks or reserves. Apartment living is also becoming more prevalent in the suburbs and may be appealing to younger people moving out of home for the first time; it may also attract single parents with smaller families.
No matter where the property is located, a home that is well maintained and presented will generally attract a better quality of tenant. If you advertise a property that looks like the worst house on the street, what sort of tenant are you likely to attract? You want your property to reflect the kind of tenant you want to apply for your home, and someone who aims to maintain it to the same level they take it over in. If it looks like you don’t care, they may not care either.
Once you have decided who your target tenant is, start searching and keep this front of mind. When inspecting a property, put yourself in the shoes of the prospective occupants; do you think the home will meet their criteria, and will the location and its amenities service their needs? If the answer is yes, then take the next steps to make it yours. And if the answer is no, keep hunting; what you’re looking for is out there somewhere, it may just be a matter of time.