It’s an age-old question and unfortunately one that many investors give scant thought, too, which is a mistake.
You see, without tenants then there is no successful property investment and there is no cash flow.
It really is as simple as that.
Many investors falsely believe that they can any property, good or bad, and tenants will be lining up at the door to rent it but this just isn’t true.
But investors must also understand, and keep in mind, their tenants’ wants and needs to make the most of the large tenant pool out there.
Firstly, as an investor, you want your property to appeal to the maximum number of potential tenants in order to minimise the periods of vacancy.
If you have the sort of property that appeals to many tenants, you’ll have more interest and therefore it will generate a higher weekly rent.
The key to selecting the right investment property is to choose a highly desirable property, as purchasing one that everyone wants to live in will help ensure that you get good capital growth and rental returns.
It also makes sense for landlords to learn about the sort of features that tenants most commonly ask for, which usually include the following attributes:
- Number of bedrooms
- Number of living areas
- Number of bathrooms
- Outdoor entertaining areas
- Car accommodation
- Fixtures and fittings
In my experience, the number of bedrooms is the single biggest factor for renters.
Sure, you can have added extras like air conditioning and off-street parking, which are both attractive to tenants, but these have less impact than the number and size of bedrooms given the large number of younger people in share accommodation.
Whether you’re buying a house or a unit, a property with lots of bedrooms is sought after by renters because the more bedrooms you have, the more people can live there and share the cost.
The size of the bedrooms is also equally important.
For many tenants who share this is their only private space.
The next biggest factor is the number of living areas, with two separate living areas in a house working best so your tenants can have some time away from each other.
The number of bathrooms is very important and should be in proportion to the number of bedrooms.
As a general rule for properties with more than three bedrooms, then you really need to have two bathrooms, even if one of them is an ensuite.
We all know that location rules the roost in real estate, so it’s make sense that good locations within 10 kilometres of a major city are property gold.
Of course, there are plenty of great investment properties further out than this inner-ring, but this is where you have to do more research to be safe.
Proximity to transport is more important as you move out from the city, but if you’re within a few kilometres of the CBD, you’re always going to be close to a bus, train or tram.
So, as you can see, successful property investment isn’t as simple as buying a property and plonking a tenant easily in it.
Investors must always keep in mind what tenants wants and do their very best to satisfy these desires, which in the end will mean higher rent returns and a faster journey towards financial independence and freedom.