If you are looking to purchase an investment property, you may find yourself in a situation where you need to choose between two properties. When it comes to determining how attractive a property is as an investment, it may come to more than the purchase price and rental income.
There are a number of ways to determine this. Here are a few tips to get you started.
What is the position?
Where is the property located? If the property is on a busy street with minimal parking, renters may not find it as attractive as a property in a quiet suburban street with wide roads and plenty of on-street parking. The way a property is positioned could also affect its value. For example, if the main bedroom is facing the direction of where the sun rises or sets, it could become a hot box in the morning or afternoon and may become very unappealing to renters. These factors could have an impact on a home's value and/or appeal.
Quality of the property
You will need to look at the current state of the property and whether further repairs or renovations will need to be completed in the near future. You may find that a home has a bargain purchase price, but if you end up having to spend thousands repairing fixtures in the months after buying, it may not be worth it. Make sure any renovations are included in your budget when comparing.
How close is the property to the nearest shopping centre, public transport and school? This is especially important for an investment property as most renters want to have the necessary amenities near by. You will also be able to appeal to a larger pool of potential renters if the property is within a short distance to a number of different amenities.
Don't forget to look beyond the property you are interested in. What are the houses like around the property and within the street? If the property is in a well-kept and well-maintained area, it may help boost the property's value and attractiveness to renters. Don't forget to visit the property at different times during the day. You may find that the street is quiet during the middle of the day on a Wednesday, but what about weekends and night time? You don't want to have disgruntled tenants who are constantly complaining about loud parties every Friday night.
Although this is just a short list of factors to consider, it can help you decide which property may offer a little bit more to your portfolio.