To maximise any property investment, it’s important to understand the profile of your target tenant and what is important to them, before purchasing off-the-plan.
Speed dating is not for astute investors!
As a property investor, it’s unlikely you will ever live in the property you purchase, so it’s startling that people often overlook the mindset of the tenant before they purchase.
A clear trend
We are witnessing a clear trend in many of our projects at settlement regarding what’s on offer for rental apartments; in the end, it all comes down to the likely rental income your investment property will generate and whether there is sufficient demand from a target tenant group.
Do your research
The key to the success of your investment is to do your own research and discover whether the apartment is well matched to the target tenant and whether the potential rents match the financial returns.
To begin your research, understand the household structure and demographics in the area you are looking to buy.
These statistics are readily available on the internet.
The information you’re looking to find out includes:
What percentage are singles?
Do I buy a one bedroom apartment?
What percentage are couples?
Do I buy a two bedroom apartment?
What percentage are families?
Do I buy a three bedroom apartment or townhouse?
Here are some other key questions to help you calculate whether the apartment on offer suits the surrounding demographics:
QU: What is the average age of tenant in the area?
This will often dictate the interior style of the apartment and the common amenities you are offering.
What is the nature of employment?
This can influence the style of apartment your tenant will covet.
What is the average income for people in the area?
This will determine the level of rent your prospective tenant can afford.
Consider your demographic
Demographics also play an important part in determining the amenities and physical make-up of the apartments and whether they will be successful in meeting a tenants need.
What is security like in the building?
This will effect both elderly people, single women living on their own and parents who value the security of their family.
What are the building amenities?
Are the tenants going to feel proud to have guests over? Will they appeal to the demographic?
How functional is the apartment layout?
Look out for long corridors, low ceiling heights and limited or small windows. Natural light is king. Island benches are important so find out if they are included. if they are not included in the design they generally wont fit, so tenants are now asking whether they are included as a gauge to apartment size.
Are the finishes on trend?
By this I mean is the internal design the latest look and feel or already dated? Be conservative in this regard as you don’t want your interiors to date by the time settlement comes around.
Always go the light option (white or off-white), for wall finishes that you can dress up with colour later.
These questions and some demographic research, including finding out what other one or two bedroom apartments are being offered for rent in the area, are critical in making an informed decision about whether to select a particular property for investment.