Many of us are spending a lot more time at home, with work from home (WFH) arrangements being the ‘new normal’ due to the coronavirus pandemic. With tenants now needing their homes to be places for work and play, new trends are emerging which reflect their changing lifestyles.
What are some of these trends, and how can you take advantage of the new opportunities they offer? Helen Collier-Kogtevs from Real Wealth Australia shares her insights to ensure your next investment property purchase puts your best foot forward.
The new criteria tenants have for homes
Having plenty of space has become essential for tenants who have now been working from home for months on end.
“You spread out more when you work from home, so having houses with extra living spaces and a study is really important.”
These days, they’re looking for an extra bedroom, study, or even a secluded hallway nook to convert into home offices so they can separate where they sleep and live, from where they work.
This is even more important for couples and families, where everyone is on top of each other in the same space. As Helen says, everyone spreads out when they’re working from home - and when you add in children who also need space to have Zoom lessons during lockdowns, extra space where all of these activities can happen is a must.
“Tenants want a bigger backyard, they want the dishwasher, they want the extra mod cons - and they want all of that because they're home more.”
With everyone spending more time at home, bigger backyards have also become more sought after. Families love them because they want to make sure their children and pets have enough space to run and play. Proximity to local parks and playgrounds is also a plus.
Tenants want their homes to be as comfortable as possible, so features and amenities like dishwashers, air conditioning and other extras have also become more important.
Even the presence of solar panels can be attractive to tenants, as the increased time spent at home may have caused bill shock due to higher energy consumption.
The regional property boom
Up until now, it’s been all about the inner city areas. Tenants have always placed a lot of value on living close to work. But high demand and higher prices means living in a small apartment, as a trade-off for a shorter commute.
With the WFH trend, regional centres have been experiencing a boom.
Having been cooped up in a small, inner-city space for months on end, more and more people are asking themselves, “Why do I sit here in this little apartment when I could go get a property in a large regional town where I can have fresh air, less traffic, a better lifestyle, and I can still work?”
“That’s something that investors looking to buy an investment property should consider. Look at the outskirts, but make sure that you’ve still got plenty of infrastructure within a 15 minute radius.”
Regional centres such as Byron Bay, Wollongong and Newcastle are ideal for those looking to get more bang from their buck in terms of property size, especially after selling homes in inner-city areas. These areas also have plenty of infrastructure built in, with shopping centres, hospitals and schools within a 15 minute radius - making them a perfect spot for families.
Actionable strategies for you to embrace the WFH trend
1. Consider tenants’ new search criteria when buying your next investment property
When considering an investment property with the WFH trend in mind, space is key. Tenants need room for home offices. Even smaller apartments can cater to the trend by providing a dedicated room or space, but this could be harder to do if it has less than two bedrooms.
“I’m telling my clients it’s almost mandatory when they’re buying a property with three or more bedrooms, that it must have two living areas. Remember, you spread out more when you work from home.”
If you’re thinking about jumping onto the regional boom, consider bigger, more spacious homes which have plenty of infrastructure within a 15 minute radius - and it’s even better if they offer easy access to large regional centres.
2. Change up your advertising strategy
If you want a simple way to embrace the WFH trend with your existing property portfolio, ask your property manager to refresh your leasing ads when you’re looking for new tenants. A 4-bedroom property can easily become a 3-bedroom home with a study, and even a big hallway or secluded nook can be converted into a home office. Highlight outdoor living spaces as great places for children to play in, and show off any extras that will make future tenants more comfortable.
It’s a simple change, but it will go lengths in making your property more attractive to prospective tenants. Don’t sit back and expect your future tenants to do the hard work in making your property work for them. Instead, ask your property manager to help paint them a clear picture of your property’s true potential.
Is the WFH trend here to stay?
It can be easy to shrug off the Work From Home trend as a temporary change in preferences, especially as news of a vaccine begins to emerge. But with experts stating that the next pandemic is a probability, not just a possibility and that living with pandemics may become part of everyday life, adjusting to the trend can future-proof your investments.
This is especially the case as the WFH trend is proving to be more tenacious than Aussies had initially expected.
Even as employees are slowly returning to offices, many are choosing to keep their working arrangement flexible in the long term. In fact, 31% of Australians with a job are still working from home most days compared to 12% before March, according to the Australian Bureau of Statistics.
On top of that, we’re seeing companies decrease their office spaces and allow workers to work from home permanently. And, as you’ll have noticed from the regional boom, countless Australians are making long-term lifestyle changes by moving to regional areas.
At the end of the day, no one knows for sure what this trend is going to look like 5 years down the track. Work preferences might change over time, and so will other factors that affect the appeal of your investment property.
How can you make sure that you’re on top of property market trends, regardless of how tenants’ search criteria change?
“The preferences of tenants might change. But when the time comes, the property managers will know about it.”
Even if there is a movement back to offices or any other change in what tenants want, Helen reiterates that property managers will be the first to know. For every property investor, it’s incredibly beneficial to ask property managers, “What’s renting these days? What are people looking for?” This ensures what you buy is going to rent all year round, and allows you to make a decision that takes any changes in tenants’ preferences into account.
Thinking of buying an investment property in the upcoming months? It might be a good idea to get in touch with the experts at Real Wealth Australia for investing advice. You can also reach out to the property managers here at :Different for up-to-date information on what tenants are looking for in 2020.
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