A notable change in the Queensland real estate market of 2014 is greater interest from investors. A recent survey found almost three-quarters of property investors are aged 45 or younger (29 per cent are younger than 32), so many are doing this for the first time. And it can be daunting.
Whether it is to secure your retirement, manage your tax bill or simply take a bigger slice of our fair State, there’s a lot of homework needed. And while many experts will say to use your head and not your heart, we all know most real estate decisions are emotional to some degree. I wouldn’t buy a property I couldn’t live in myself – and I’ve rarely met an experienced investor who would.
But the one tip we regularly offer: treat your investment property like a small business.
If you’re asking a tenant to pay $400 per week that’s an annual turnover of $20,800 - it’s not small change. You’re now in a competitive environment with other landlords pitching to the same tenant pool, and you need to see the property in this way.
When you’re looking to buy you’ll need to cover the basics – the property’s got to be well-located, well-presented and secure. But what do tenants in your preferred neighbourhood value most?
In Brisbane’s inner-city we know car-parking, outdoor living spaces and storage are their top three. We know because we asked them, and when you look for a professional property manager you need a local expert who can answer that question. In Home Hill or St George the answers will be different.
In assessing a home’s likely rent you need sound advice from a property manager who has your complete confidence (even if it has a current tenant – they may be below or above market levels). If you’re buying from a sales agent remember they have a duty to be fair and provide you with balanced market info, but their key role is to get their seller client the best possible sale price. Ask another property manager who knows their stuff as well – most will happily offer over the phone estimates of likely rents if you’ll consider using their service.
When you negotiate your property purchase, consider asking the seller to allow early access for tenant viewings before your settlement. This can save you a couple of week’s vacancy.
And once you start your tenant search, your advertising needs to look sharp. You need high-quality photos – leasing a property deserves presentation as good as used in sales campaigns. Your ad must appeal to your target market. And you need to stand out from the crowd if you want to attract the best tenants.
Owning an investment property is very much like running a small business. A terrific opportunity, but with careful planning and management required.