Buying an investment property is not something to rush into. But if you choose wisely, you’ll attract good tenants and a steady rental income, as well as benefiting from the tax deductions that come with your investment.
Here is a checklist of five key features to look for when making what is a significant investment decision.
Location is (almost) everything
Choose the right location with your investment property, and everything else should fall into place. Here are some points to look at when searching.
Keep in mind the ‘pint of milk’ test—can your tenants get bread and milk easily?
Access to public transport is another big plus—are there regular buses and trains into the CBD or other hubs for commuters? Also important is a designated car bay.
Is it a reasonably safe area? Obviously in a big city, nowhere is going to be completely crime-free, but are the local streets well-lit and busy?
Are there other services nearby, such as schools, supermarkets, GP, cafes, a library or leisure centre? All of these will make your investment property more appealing to tenants.
Is there some green space?
Look at the landscaping and try to find somewhere that has either communal outdoor space for residents, a balcony or terrace, or a park or reserve within easy reach. An apartment that offers the opportunity to be outside is going to appeal to a wider pool of tenants over time.
What is the layout, build and quality like?
Being able to view an apartment is invaluable when searching for an investment property. If you are buying ‘off the plan’, however, this isn’t possible. Have an architect look over any plans and give you their opinion.
Ask yourself if you would be happy to live there as a tenant. Does it look good from the street? Is the build of a high quality? Again, if you aren’t sure of your judgement here, it’s worth finding someone with building or architecture experience to visit with you and give their opinion. Look at the details—if things like letterboxes and bathroom fittings are of a good quality, this indicates that the developer or builder has taken care.
Look at the rooms and the layout and try to imagine living there yourself. Here are some questions to ask yourself:
Is there a good ‘flow’ throughout the property—can you move easily from different areas and does it feel spacious?
Is there plenty of natural light, and ideally northern light for winter sun? An apartment with north-facing living areas will be easier to heat and cool, while west-facing windows will create a lot of heat in summer.
Are the bedrooms of a good size, private and quiet?
Is there plenty of storage throughout?
Are the finishes and fittings of a good quality, well-maintained and attractive NB: if you are looking for a fixer upper to add value to, this won’t be so important, but do ensure you aren’t looking at lots of expensive structural work. Small flaws can reduce the asking price and save you money—so long as they are easy to fix.
Is it low-maintenance? Ideally, you won’t be spending too much on maintenance over the life of your investment, as this will cut into your profits.
What other features does it have, such as an extra bathroom or a private internal laundry?
How accessible is it for residents and guests?
Newer apartments are designed to enable easy access, with lifts and ramps. Older apartments are often not so accessible, so keep this in mind when property hunting.
A third-floor apartment without a lift will have a smaller pool of tenants wanting to live there, for example. However, location will trump everything else, so an apartment without a lift in a great location is still worth considering, particularly if your target market is inner-city professionals.
Does it feel safe?
With single-person households on the rise, particularly for older women, safety is an important factor when choosing an investment property. As well as features like security cameras, safety is also built into the design. Here are some features to look for:
- Are walkways and communal areas secure and well-lit?
- Can tenants drive into an undercover carbay and then walk to their apartment?
- Is there a sense of community, with doors and balconies visible to other tenants?
- Does swipe card access prevent people from entering from the street or getting out of the lift on floors they don’t live on?
- Do windows and balcony doors have locks?
Talk to us
If you are thinking of buying an investment property in inner Sydney, we are the agents to talk to. We have many great properties on our books, and often more on the way, and we manage many properties for investors. Please get in touch with us today to talk about current market conditions and what’s available, or our property management services.