How to find a highly desirable rental property
When buying an investment property, one of the most crucial pieces of the puzzle is rental yield. Obviously, investors want to purchase the most desirable rental property they can possibly find, without breaking their budget.
There are a number of ways you can ensure the property you are investing in ticks all the boxes for prospective tenants. In doing so, you will minimise vacancy and maximise your rental return. It’s all about doing your research on the following key aspects of any property investment:
Be strategic about location
This one really should go without saying, but a property that is in a desirable location will usually be a desirable property for renters. Look for apartments or units that are close to amenities such as shops, cafés and transport into city centres that will make life more convenient for your prospective tenants. A property in a good location or desirable suburb should also have the added benefit of good capital gains over the lifetime of your investment.
Tailor your property to the market
If you are looking at larger properties such as terraces or houses, be sure there are schooling options and parks nearby as such properties will appeal to young families. A property near schools with a good NAPLAN score is a big drawcard for families with school-aged children.
Consider the demographics
Once you are sure the location is up to par to become one of the best property investments in your portfolio, you then need to see what key demographic groups are occupying the area.
You want to ensure that the property will appeal to the biggest group of residents. This will often go hand in hand with the location, as single executives want an easy commute to work and a low maintenance property, whereas older retirees will be looking for lifestyle elements such as a property with a decent garden, level access and shops within walking distance. If the property fits the locations key demographic, you will find it easier to lease.
Pay attention to layout
The layout of the property is also key to ensuring you are attracting the right tenants. Think carefully about who will be catered for and who will be neglected with the layout of the property:
- How many bedrooms do your target demographic need?
- Are there enough bathrooms to service the amount of people that will be living there?
- Do the bedrooms have enough space for a double or queen bed, or are one of the bedrooms a kid’s room?
- Does the bathroom need a bathtub?
Ensure the property has good access to outdoor space, be it communal for the block or private to the unit. Having a good alfresco dining/living and entertaining area is very attractive for prospective tenants, especially with the climate of Australia and the BBQ culture that we have here.
Don’t forget parking
One very common ‘deal breaker’ for tenants when reviewing potential new homes is whether the property has off-street parking or not. Especially for properties in highly congested areas, parking is very desirable and will generate more interest from tenants as well as a higher rental price.
If you do decide to purchase a property without off-street parking, then ensure that it is within walking distance to all essential amenities and to good transport options, so that your prospective tenants can get to the shops and to work without the need for a car.
Last but not least: Convenient extras
There are many things that are considered ‘bonus extras’ in rental properties that will increase the demand and desirability of your property. An internal laundry would have to be the most desirable as tenants do not like the idea of leaving their apartment for the communal laundry with a heavy load of washing in a basket.
A dishwasher is another feature that adds value. Other than the obvious time saving convenience it offers tenants, they are often more economical on water usage and promotes a cleaner and well maintained kitchen area.
Another convenient extra to consider is the amount of storage that the property has. Built-in wardrobes in bedrooms, pantry spaces in the kitchen and floor to ceiling cupboards or entertainment units in living spaces often appeal to prospective tenants. Further to this, a storage cage or attic space is a great way for them to keep belongings out of sight and out of mind.
If a property combines most of the above aspects for desirable rentals, then you will have no trouble in securing a tenant at a good market price. However, budget restrictions will often mean that you may not be able to satisfy all the needs of prospective tenants in the one property.
Just be sure that the ones you are willing to compromise on are the ones that your potential tenants will be willing to compromise on also.
Put yourself in their shoes and remove emotion from any purchase. You may fall in love with a property but remember that the property will not be a home for you, it’s a home for your tenants – tenants that will be helping you pay off the mortgage, so give them good reason to.