When buying an investment property, you should apply the same “rules” about location, condition and security as when buying a home for yourself.
That’s the word from Berry Everitt, CEO of the Chas Everitt International property group, who says that volatile equity markets, relatively low interest rates and banks eager to lend on residential property have spurred an increase in buy-to-let purchases this year, in spite of slow rental growth rates.
“An oversupply of new units in many popular areas and negotiable prices are also drawing investors back into the market, but they do need to remember that while price is important, cheap is very seldom best. The area in which a property is situated, its overall condition and security considerations are all equally important when acquiring a home to let,” says Everitt.
Depending on the area and your tenant target market, other factors that could make your property more attractive are good schools within walking distance, as well as convenient shops and health, entertainment, sports and public transport facilities. And in holiday or resort areas the most sought-after rental properties are always those closest to the main attraction, whether that is a beach, mountain, hot spring or game reserve.
Finding the right property - as well as reliable, creditworthy tenants should never be left to luck
What is more, he says, finding the right property - as well as reliable, creditworthy tenants should never be left to luck. “Prospective investors should seek out a qualified, experienced and reputable estate agent to help them evaluate the soundness of any proposed property purchase, and to help qualify prospective tenants.”
Over the medium- to long-term, they will also need to be certain that the property is well-cared for and maintained and that the rent is paid on time. This is where appointing a specialist to manage the investment makes good sense.
Writing in the Property Signposts newsletter, Everitt notes that few investors are prepared or able to be full-time landlords and that this responsibility is best delegated to an experienced, well-briefed rental agent based in the vicinity of the property.
“For a start, such an agent will be able to deal objectively with tenants who don’t pay or who damage the property - and should also have an established network of competent contractors to carry out necessary maintenance and repair work,” he says.
“In addition, an agent who specialises in managing rental properties will ensure that the investor receives ongoing professional advice on the host of laws and regulations that govern landlord-tenant relationships, and on compliance with and changes in municipal regulations.”
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