When looking for investment properties to add to your portfolio, it's important to remember to pay attention to more than just price and property condition. You need to view every property through the eyes of potential tenants. Who will be renting your property? What types of tenants will a particular neighbourhood attract?
Investment property purchased for letting out requires a tenant-based approach rather than just following the old principle of adding value to property. As a landlord, you need to keep in mind how attractive it will be to live in your house.
Here are five things to look out for:
1. Public Transport
More often than not renters are going to be people who work in the larger cities and major metropolitan areas. Traffic and the cost of petrol dictate that many of these workers will prefer public transport over driving. Investment properties you choose should be within a reasonable distance of public transport systems.
If you are looking at investment property for sale in more rural areas, public transport is not an issue. But then you're looking at easy access to petrol stations, etc.
2. Entertainment Options
It's no secret that we love to get out and about with friends and family. We love sports, live music, and just going to the pub. The best areas in which to purchase properties will have at least a handful of local entertainment options as well as easy access to those outside the local area.
Property developers looking to rent primarily to families need to choose properties in areas with good schools. While it's true London and its outlying suburbs have some really good schools, other areas have fine education systems as well.
Some investors prefer to buy units they can rent to university students. This type of strategy obviously encourages you to focus on areas with heavy university populations. The larger the university, the larger the pool of potential renters.
4. Property Values
Any strategy of purchasing investment property will likely involve comparing local property values as a measure of an appropriate purchase price. However, local property values can also be helpful in telling you something about the quality of life in specific areas. In other words, lower property values tended to be tied to less desirable neighbourhoods – neighbourhoods where questions about peacefulness and crime may dampen enthusiasm among tenants.
When buying investment properties in urban areas, parking can sometimes be an issue. You need to understand that limited parking availability will limit the tenants you can rent to. Off-street parking is best, but any parking will do as long as it is adequate.
The other standard rules of investment properties obviously still apply. You want to try to get properties at bargain prices in order to maximise your return on investment. You want to be careful of pitfalls relating to property condition, limited paperwork, legal obligations, and so on.
Successful investors know both what to look for and who to use as agents. The best in the business choose Fruitful Property as their agency, because they know the quality of the properties we offer is second to none. Our primary focus is to help you build your portfolio into a successful property development business you can be proud of.
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