6 Oct 2015
The latest figures produced by CoreLogic RP Data show that during August 2015 Capital city rents had increased by their slowest annual rate of growth on record at just 0.7%. In addition, rental yields for all Capital cities also bottomed at just 3.5% with Sydney and Melbourne recording record low rental yields.
Finding a tenant in this challenging environment who is prepared to pay a premium rent for a property, is now a key priority for landlords to boost their rental returns and improve their investment. This is particularly the case for first time investors who tend to be heavily geared and rely heavily on good rental returns to cover their mortgage repayments.
Most first time investors make the mistake of buying an investment property that will not appeal to a broad range of renters and this limits their potential rental income.
Below are 8 key points that first time property investors should consider when selecting an investment property to appeal to the most amount of renters.
- Check the rental vacancy rates for a range of areas. This will help you understand the overall demand for rental properties in that area and a guide of how much rent you can expect to receive.
- Generally speaking, choose a suburb which has a low number of rental properties. This can make your property more attractive to tenants. The property should also have good street appeal and be clean and tody throughout the property.
- Owning an investment property close to social infrastructure such as shops, schools and universities can help strengthen your chances of renting you property. Many young families and also international students will pay a premium to be close to transport and education institutions.
- Consider adding ‘extras’ to your investment property such as a dishwasher, washing machine and air conditioner. Although it becomes your responsibility to maintain these items over the life of the rental, they are a great appeal to most renters.
- Security is becoming a major factor for tenants when looking for a property to rent. Your investment property should include great security that is up to date and functioning.
- If you are considering purchasing an apartment as an investment, find a complex that has secure parking. Lack of secure parking is a huge deterrent for most tenants wanting to rent city or fringe city properties.
- If your property has a garden that needs to be maintained, ensure you have a professional who regularly maintains it. Many tenants find the hassle of maintaining a garden for the landlord a hassle and will often look for alternative properties.
- If you have considered renting your property fully furnished, ensure the furniture is of high quality and clean. Tenants leasing furnished properties, generally have high standards and will not settle for outdated or dirty furniture.
For more advice on property investing or if you need a professional property manager for your property. Please feel free to call our office on 8352 3444.