Finding a suitable investment grade apartment when you’re investing in property can be a challenging undertaking in itself. Add to that the difficulties in finding and keeping the right type of tenant for your new property, and you can see why most investors tend to leave these tasks to a professional management company or real estate agent. It goes without saying that having a property that is attractive to good and reliable tenants in the first place will be a critical step in owning a successful and stress-free investment. Let’s look at four of the most important things renters look for in an apartment.
Choose The Right Location
Ever noticed that some areas seem be in demand among renters? These locations also often experience above average annual increases in rental prices. This is simply because they are desirable places to live. According to research they will generally be within a 10 to 20 minute radius of a major capital city, be close to transport such as buses, trams or railway stations, have good access to restaurants and cafes, shopping and entertainment venues. Being close to parks, gyms and recreation areas has also become more important. In most capital cities people enjoy living close to the city centre and will make that their “playground” on weekends and weeknights.
Simple geography is not, however, the only key to finding the right spot for your property. Having attractive surroundings is also an important factor in whether a tenant chooses your property over the one next door. These days brand new developments are very good at landscaping the area around the apartments, creating stylish surroundings, beautifying the streetscape and even adding value through having cafes or shops on the ground floor of the block. This is why many people looking at property investment for the first time prefer to choose off the plan apartments from established builders and developers as they can get a good indication of the “look and feel” of the finished property from past projects.
When faced with a number of apartments at an open inspection, especially if they are all brand new, tenants will generally look for certain features that are high on their priority list. These can include (in no particular order):
- A good floor plan and a feeling of space
- Air-conditioning and heating
- A balcony
- Gas cooking appliances
- Storage and built in wardrobes
- Security features such as intercoms
- A lift
While everyone has different needs, this list gives a good indication of the features that will make a property more desirable than others in a similar location or price bracket[i].
Determining a weekly rent price that meets your financial goals as well as attracting tenants can be tricky to get right, especially for first time landlords. Professional property management companies and real estate agents can be very helpful in providing guidance on local market prices and expectations from potential renters. The general rule is that the cheaper the rent the faster you will attract tenants, especially when renters are given the choice of more than one comparable apartment (for example, in the same brand new development). However sometimes this strategy can backfire, and you may end up the wrong type of tenants (who may wish to leave the minute you conduct a rent review). Understanding the local market will go a long way to determining the rent you can charge for your property investment – is your apartment, for example, in an area with a lot of students, or does it appeal more to professional couples who will be willing to pay more?