PaydayNow: What to look for when purchasing an investment property

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As an investment property, are you looking to acquire an apartment? Before you buy, here are some things to keep in mind.

Investing in real estate

As an investment property, are you looking to acquire an apartment?

Units have long been seen as a low-cost alternative to houses. Still, they are also being viewed as a method for property investors to access the significant financial gains generally associated with the sector’s counterpart.

However, it’s crucial to remember that not all apartments are constructed the same. Therefore landlords must be aware of this. There are good and bad units in any portfolio when it comes to investing.

As shown on Payday-Now`s website, As a real estate investor, you’ll need to consider more than simply the purchase price and location while looking for a place to buy. Other crucial elements will determine whether or not your unit purchase is a sound investment.

Regardless of whether this is your first or tenth investment property, here are some things to consider.

1. The location

The location of an investment property is one of the most critical variables in determining its success.

However, don’t only concentrate on getting into a sought-after neighborhood. Focus on the placement of the units inside specific locations. Most renters want to be close to everything they need, even if it means walking a little distance to get there.

Look for a place close to everything you need, including a decent school, a shopping mall, a park, and public transportation. To attract renters, you need to acquire an apartment near these attractions.

Here are our eight suggestions for locating a suitable investment property in a nearby suburb, in case you want to learn more.

If you live near other individuals or families, you’ll want to seek a unit with a high level of security.

People who live in smaller neighborhoods are more likely to know that their neighbors can get by without as many security measures as those in more prominent areas.

However, in more significant structures, safety takes precedence. Ensure the building is accessible for inhabitants to go in and out of while keeping outsiders away.

2. Level

The location of a unit in a building is an essential factor when purchasing a unit. You should acquire an investment property that will appeal to the kind of people interested in renting or buying it down the road.

In other words, whether your target market is primarily young families or empty-nesters, they will most likely seek a convenient and safe unit. These prospective renters prefer apartments on the first two floors of a building, where most of the best ones are situated.

If you’re looking to make money as an investor, the first level of a unit complex is your best bet.

If you buy a flat on the first floor, you don’t exclude any of your target audiences from the property. However, suppose you acquire a unit above ground level. In that case, you may be excluded from your target market, the elderly and those with small children concerned about the dangers of falling from a high location.

3. Directionality

The unit’s orientation is another item to keep an eye on.

There is a great demand for condos with a northern exposure. This is because these homes have a lot of airflows, which means they have a lot of natural ventilation. In addition, this will help you avoid a musty, stale flat.

It’s a significant plus for most unit residents because north-facing flats receive a lot of natural light.

It’s also a good idea to look for a place that isn’t near a busy road or neighborhood. Listen for sounds coming from neighbors on all sides to get an idea of the noise level in your apartment. It’s also good to ensure that the building’s location isn’t too noisy for potential tenants.

4. Strata

The stratum is something else that investors overlook when purchasing a condominium. Being a condo owner necessitates familiarity with strata. Some extra expenditures and requirements come with owning property on a strata title held by a broader community.

Your investment property’s cash flow would be significantly impacted if you have to pay strata fees. Maintenance and upkeep of the building are covered through strata fees. If the strata charge is too expensive, you may decrease your rental revenue.

Consider all of your costs before purchasing, including strata fees and utility costs, as well as council rates and interest rate increases.

Investors must also consider strata regulations in addition to the fees. Strata rules limit what you can do to your unit, both in terms of what you can do and how you can utilize it. As an owner, you want to be sure the strata regulations of the building you’re contemplating don’t restrict your freedom too much.

It’s good to acquire a strata report to see whether the unit and the complex have had any past concerns, such as maintenance or complaints, which may be seen in the information.

5. a place to leave a vehicle

You’ll attract more tenants and purchasers if you have a parking spot or off-street parking (particularly in urban regions). If the apartment you’re looking at is a considerable distance from public transportation, this is a desirable option.

Investing in a parking spot may cost you more upfront, but it will pay you in the long run.

On-street parking may be an excellent alternative to off-street parking, a significant selling point for apartments.

When purchasing a property with off-street parking, you’ll also want to make sure that there is enough parking for visitors to the facility.

6. It’s important to note that size does matter.

Bedroom and floor space are other important considerations when purchasing an apartment. That’s because your potential renter pool is heavily influenced by the size of the unit you buy.

Investing in an amount that is either too little or too high may result in a restricted investor’s market.

For investments, two-bedroom apartments tend to be the most popular since they attract many buyers, including families, flatmates, and single professionals.

7. Aesthetics and build quality

A structure with visible fractures in the walls might indicate a more significant structural issue, which could end up costing you a lot of money to remedy in the long run.

When it comes to a condominium complex, most investors assume that the body corporate is responsible for conducting building and pest inspections (which they should be).

Even while many body corporates have what is known as an “emergency fund” or “sinking fund,” there are rare circumstances when this cash does not exist or is insufficient to address current difficulties in the building.

In these situations, hiring a professional building inspector is highly suggested to ensure that you don’t overlook any damage that may be concealed.

Consider the acoustics and ventilation in older residences since these issues are typical in older homes.

8. Enhancing the bottom line

There are several factors to consider when purchasing a rental property, such as the possibility of a financial gain when the time comes to sell the property or the desire to increase your rental income.

Find a place where you may increase your return on investment by making modest aesthetic modifications (such as repainting or installing new fixtures) or significant structural adjustments (such as adding an addition or splitting rooms).

Take a look at these quick and low-cost remodeling ideas to get you started.

Investors’ buying-a-unit checklist

It’s essential to make sure your device meets the following criteria:

Location

  • Is the property near schools, public transportation, and shopping/dining establishments?
  • Is the area secure and peaceful?
  • Is the property situated in an area in high demand and has the potential to rise in value?
  • How well-protected is the abode against intruders?
  • Do outsiders have a hard time entering the complex?
  • Is there an intercom/CCTV system in place?
  • What are the current security measures in place?

Orientation/noise

  • Is there a northward orientation to the unit?
  • Is there a lot of traffic around?
  • Is there noise coming from the next flats while you’re inside the house?
  • Does the noise from the apartments above or below you make it clear?
  • Is the apartment well ventilated with open windows?

Strata

  • How much does it cost to live in a strata unit on an annual/quarterly basis?
  • What are the unit complex’s strata rules?
  • A location for one’s automobile to park
  • Is there a place to park near the building?
  • Is there parking available on the street in front of the building?
  • Is there an enclosed parking area (e.g., a garage or parking lot)?
  • Is there a specific parking lot for the building?
  • Does the building have a designated parking area for visitors?
  • Is the parking lot safe to park in?

Size

  • Count the number of bedrooms on the property.
  • Is there enough room to accommodate a family? Just one working professional, please?
  • How big is this apartment compared to others in the same price range?
  • Is there a washer and dryer in the unit?

Possibility of value addition

  • Are renovations or additions possible?
  • Is there a simple/cheap method to increase its value?

Construction

  • The ceiling and floor should be free of cracks.
  • Is the condition of the windows and doors excellent and working?
  • Are there enough outlets in the device?
  • How well-maintained are all fixtures and fittings (taps, handles, lights, etc.)?
  • Is everything working in the kitchen?
  • Is the structure of the apartment strong?
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