Are you looking to add to your investment portfolio? Want to know what to look for in a good rental property? Want to achieve a good return on investment property?
Without a doubt, one of the best ways to find a good deal on an investment property is to choose a property that is easy to rent out. But how do we find a good rental property from the huge number of properties for sale? To earn a good return on investment property, we need to select good fundamentals. Such as clean interior, fresh paint, new floor coverings. The simple essentials need to be covered. Doors and windows that work properly are always a good tip that tenants like. Doors and windows that lock securely are even better! Sometimes these are the things that we overlook when searching for our own property. We think we can always fix these little things later. But these are things that a tenant needs and expects. The simple essentials are highly desirable features to tenants and help to increase the return on investment property.
A good rental property might not be the same as a property we choose for ourselves to live in
The trick is to make sure that you choose an investment property that is ready to rent out straight away. If not immediately, very, very quickly. The best way to increase the return on investment property is to put in up on the rental market as quickly as possible so that it can start to earn you money. Although it may seem like a good idea to buy a renovator that is under market value, you have to make sure you can fix it up quickly. We have seen renovation projects that can transform a property from an ugly duckling into a fabulous property. But if this takes too long to complete, then it may not provide the best return on investment. Remember, there's capital value return and cash flow return. Typically, good return on investment property has enough of both!
Choose good fundamentals for return on investment
Rather than choosing an investment property based on all the glamorous fittings and finishes, let's stick to the expected essentials. We believe that the best return on investment property comes from the fundamentals. This means that good solid foundations, structure and roof can add more value in the long run. Many people focus on the kitchen appliances and how new the bathroom fittings are. But these may not always the most important features when it comes to a good rental property. So the opportunity for property investors is to locate a property that is structurally sound rather than glitzy. Better still, if you have the opportunity to instantly add value, you can. If you add a nice new coat of paint and floor coverings, then you have the fundamentals for a good return on investment property.
Find the best bang for your buck
While this may seem like a cliché, there is definitely potential here to create a good return on investment property. For a thousand dollars, you can take a diamond in the rough, and polish it beautifully! You would be amazed how a new coat of paint can lift a property in a short space of time. And paint is cheap! A few floor coverings, and maybe some new window coverings, and you can dramatically increase your return on investment. The difference here is that you can do some of these improvements yourself, and very quickly. Remember the trick is to get the rental property onto the rental market as quickly as possible.
You can engage us here at Position One Property Management Agency even whilst doing the repairs. We can advertise the property and go through the selection process before you have even finished. Often we can have a tenant ready to move into your investment property straight away.
Don’t get stuck with problems
The most run-down property with the most work needed is not necessarily the best investment. No matter how cheap it is, or how much potential there is. The worst problem you can find yourself in is extensive structural repairs. If too many renovations are needed, you'll probably run into problems with time and budge. Your investment property will remain empty during big and long renovations. Furthermore, no-one is interested in inspecting a work site, no matter how good it will look after completion. Likewise if you find structural issues after a tenant moves in. There are too many other rental properties to choose from and a tenant will simply look elsewhere. It is all about finding a property that is easy to find a good tenant, rather than simply trying to maximise the weekly rental.
Choose a good property manager to increase the return on investment property
Here at Position One, we understand how the rental market works. We understand what our tenants require from a property. And we understand how to achieve a balance between needs and desires. A good rental property needs to be clean, fresh and well maintained. In order to maximise the return on investment property, we strive to keep our tenants happy, as well as managing each investment property to the owners requirements. If you want to maximise your return on investment property then call us at Position One – 07 38434 511 and we can arrange an obligation free appraisal.
DISCLAIMER: We are not financial advisors and none of the information provided here is offered as financial advice. It is up to you to seek your own independent financial advice. We do recommend seeking the services of a qualified and experienced Tax Accountant. They should be an expert in dealing with property portfolios, and ideally is a property investor themselves. This is a general overview of rental property investment opinion and the details vary with each person’s situation. You may find this link helpful https://www.tpb.gov.au/qualifications-and-experience-tax-agents
If you enjoyed this article, you may enjoy these articles also: