Perry Beebe
23 Sep 14
As specialists in residential property management, we are often asked which properties make the best investment properties. In general, the more money you spend on an investment property, the higher the rent. However the answer to this question is more complex, as there are many factors that determine if a property is attractive to tenants.
“The number and size of bedrooms affects rent ability and rental price more than any other factor”
First impressions are critical when a prospective tenant inspects your property so presentation is the next most important factor in determining how much it will rent for. A well-presented property will generally rent faster, achieve higher rents and attract the best quality tenants. That adds up to a higher investment return, together with fewer and shorter vacancy periods.
This is the single most important factor to tenants. More bedrooms generally mean more people can live in the property so the rent can be higher. However, the number of living areas and bathrooms must balance with the number of bedrooms. In general houses with three or more bedrooms should have two bathrooms.
2. Number of living areas
A “living area” includes living rooms, dining rooms and rumpus, play or activities rooms. Additionally, tenants may include an outdoor entertaining area in their assessment of living areas, if it is covered and easily accessible from the property.
3. Number of bathrooms
Number of bathrooms must be in proportion to the number of bedrooms. One bathroom is acceptable in a two bedroom property as long as it is not an ensuite. Ideally a three bedroom property should have two bathrooms, and this is essential for properties with four or more bedrooms.
4. Presentation
First impressions are critical when a prospective tenant inspects your property so presentation is the next most important factor in determining how much it will rent for. A well-presented property will generally rent faster, achieve higher rents and attract the best quality tenants. That adds up to a higher investment return, together with fewer and shorter vacancy periods.
5. Location
Property location is moderately important to tenants. Most tenants will have particular criteria around location, such as the property must be close to a train station or bus route. In the Wollongong area, such criteria can mean that multiple different suburbs are suitable. In terms of physical location, people don’t like living on busy noisy roads. However, a well presented property on a busy road will rent more quickly than a poorly presented home in a quiet area. For some tenants, easy access to shopping areas, schools, parks, hospitals etc. can be a factor in selecting a location. In January/February and July we experience a significant increase in tenant enquiries for properties close to the university.