One piece of advice you’ll often hear from property experts is to “treat your property like a business”. After all, just as you would in a business, you’ll want to maximise the ROI on your investment property. But what does this look like in action?
If your investment property is your business, then your tenants are your customers. And as obvious as this may sound, it’s important to tailor your products so that they align with what your customers’ needs. At the end of the day, buying a property that tenants want to live in is the only way to reap the benefits of your investment.
“As investors, the goal is to rent your property 365 days of the year. So you want to be purchasing a property that tenants want to live in, and you want to make sure that that area has a really high percentage of people renting. Regardless of the market, you’ve got to do that as a bare minimum.”
Questions to consider
Buying a property with your tenants' desires in mind isn’t just about having state of the art dishwashers or modern finishes. Instead, think about the features of the house that can’t be updated in a simple renovation. You can’t turn an apartment into a house, or add 2 bathrooms without it costing an arm and a leg.
That’s why it’s especially important to consider what tenants are looking for in a home even prior to buying an investment property. You’ll want to ask the right questions to find out what tenants in the area are searching for. Consider things like:
- Do apartments, houses, townhouses or units rent more easily?
- Are the people renting in the area mostly families or students, singles or couples?
- How many bedrooms or bathrooms do they expect at a minimum?
- Do people want garages, or is on-street parking sufficient?
You might be thinking: "Okay, you've told me what questions I need to ask. But how do I actually go about finding the answers to them?"
Real Wealth Australia’s checklist: how to find out what tenants want
According to Helen, a useful way to go about finding information specific to a local area is to talk to at least 5 or 6 property managers.
“The more property managers you interview, the more concrete your answers are. If you’ve got 6 people all singing the same song, then you can go forward with confidence.”
Property managers who know the area will not only have valuable knowledge from their personal experience dealing with tenants in the neighbourhood, but will also be able to give you insights into which types of properties rent more easily.
This checklist will guide you through the process with the questions you should ask local property managers.
Checklist: How to find out what tenants want
Your guide to the questions you should ask when buying your next investment property.
Making sure you go through this checklist each time you’re considering a new property will ensure you’re buying the most suitable property for the market.
Remember, it’s important to consider more than just a property’s potential for growth or if it’s in an up-and-coming hotspot. Talk to a couple of different property managers in the area to find out what tenants are actually looking for in a home. If you do your research properly, you’ll be able to jump into your next investment property purchase with confidence.
Note: this checklist is part of Real Wealth Australia’s The Blue Book (worth $137) which provides valuable research tools to help investors find ‘gems’ instead of ‘dud’ properties. :Different has partnered with Real Wealth Australia to provide valuable property investing tips and information to :Different subscribers.
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