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What do tenants want?

What do tenants want?

By Jessica Darnbrough

As we all know, interest rates are sitting at historical lows.

This has helped make the cost of borrowing more affordable than ever before – which is great news for both potential home buyers and property investors.

And the good news keeps coming for investors. Over the last 12 months, property prices have continued to climb fairly steadily across most markets – especially Sydney and Melbourne.

During the last financial year, property values climbed 8.3 per cent across the combined capital cities and, if the economists are to be believed, there is no reason why property price growth should start to slow any time soon. With that in mind, now could be the perfect time to buy an investment property and start future-proofing your wealth.

Of course, if you have never purchased an investment property before, finding the perfect dwelling can seem like a tough task. Thankfully, there are a few simple steps that all potential property investors can employ to ensure they buy the right type of property that will attract good tenants.

Step 1: Understand it is not your home

When shopping for the perfect investment property, it is important to understand that you will not be living in the property, and therefore, it doesn’t have to meet your specific requirements.

A successful investment property needs to cater to a broad range of tenants.

According to Mortgage Choice’s annual Investor Survey, two out of every three investors think about a potential tenant and what type of property would suit them when buying an investment property. Almost 40 per cent of respondents said location would matter most to a potential tenant, while a further 31 per cent said tenants would be most interested in renting a property that was low maintenance.

The reality is, when it comes to finding the right investment property, both of these elements will matter.

Step 2: Buy in the right location

Location is a key driver when selecting an investment property, so it’s important to buy in the best location you can afford. A property offering good transport links and proximity to outlets such as shops, restaurants, parks, schools and even hospitals is ideal. The more ideally located a property is, the more tenants will be attracted to it, which is exactly what you want.

Step 3: Security matters

Perfect location isn’t the only thing a potential tenant will look for in a rental property. If you want your investment property to always enjoy strong tenant demand, then the building needs to be safe and secure. In the same way you want to feel safe in your home, you want your tenants to feel safe in theirs.

If a tenant feels safe in their property, they will be more inclined to stay long term – which is exactly what you should want as a property investor.

Step 4: Parking is key

In addition to a secure premise, easy access to available parking is also a must have. Whether you believe it or not, off-street or undercover parking will add value to your property come re-sale, and help attract a wider range of tenants. As any property investor will tell you, the key to a successful investment, is buying a property that not only appeals to potential tenants, but appeals to other buyers.

Step 5: Consider your tenants needs

There are a couple of things all tenants will look for inside their rental home – namely plenty of storage and plenty of space. Having ample storage solutions is a massive plus for tenants. The more storage you have, the more likely your tenants will be to stay for the longer term.

Further, plenty of storage facilities could also help to ensure that the property remains well kept. Also, tenants don’t want to feel cramped in their rental accommodation, so they’ll be looking for properties with nice open spaces that are low maintenance. Properties that can be easily and cheaply maintained are more likely to enjoy high tenant demand as renters will see the property’s upkeep won’t monopolise a lot of their time.

By purchasing an investment property with potential tenants in mind, you can ensure your chosen property boasts strong rental demand and, in turn, becomes a successful investment strategy.

About Jessica Darnbrough

Jessica Darnbrough is the company spokesperson for Mortgage Choice and is responsible for supporting and solidifying the company's strong and professional brand.

Original author: Jessica Darnbrough
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