Do you want Rental Risk or Rental Reward?
July 29th 2022
Buying a rental home is a major step. Before you make an offer on your next rental purchase, check out these tips to turn investing risk into investing reward:
Do you have a team of trusted advisors to answer your investing questions? At the least have a mortgage broker, independent property manager, property lawyer, and property accountant to work with you on your investing journey. Ask for referrals and check out online reviews, and have a list of questions to help identify the right match for you.
Do you know what type of home will appeal to quality tenants?
Ensure the basics are right! North-facing, lots of light with large windows, good private outdoor space, a safe and friendly neighbourhood, and located with other well-maintained homes.
Have you had an independent rent appraisal? Don’t rely on one provided by the sales agent.
Is the property under-valued, or under-rented? Look for homes with the opportunity for improvement that will increase the rental return and value.
Are there easy improvements tenants will love? Add a dishwasher; replace the letterbox; cut back overgrown trees and shrubs; or fence the backyard so it’s secure for children and pets
Can you make the home cosy and welcoming if it isn’t already? Light and fresh decor and warm curtains will help in winter, and outdoor shade appeals in summer.
Is the property currently rented? Before you agree to take a property with existing tenants, get confirmation in writing they pay rent on time, look after the property, and haven’t been given any breach letters.
Has a Healthy Homes report been completed for current compliance regulations? Include the requirement for a meth test in the purchase conditions.
For a flat or townhouse in a block, be aware of issues around maintenance of common areas, shared driveways, and that you won’t have control over neighbours.
If it’s an older home, is there scope to carry out minor renovations to increase the value and rent? For example, can you create an extra bedroom from the corner of a large living room, or add a covered deck to increase usable space for a smaller home?
If it is a new build, will there be 30 other homes in the same development for rent at the same time? Please see more New Build vs Existing Home.
Have you allowed cash in your purchase budget for extra costs; vacancy until tenants can move in; items that may need repair or replacement, or to meet compliance with Healthy Homes. Most common: leaking HWC , extra heating required, draught-proofing, insulation and plumbing issues.
What ongoing work needs to be done to keep your property well-maintained? Account for this in your budget projection.
If you are purchasing specifically for a desirable school zone, remember these can change.
Will the property format and size still be what tenants want if the economy changes, during the pandemic, or if immigration numbers go up or down?
If you would like to have a chat about your investing requirements, or you’d like to know more about the Ruby Housing management process, please contact Kim Willems as below:
- P: 03-3795033
- E: firstname.lastname@example.org
- FB: www.facebook.com/rubyhousing
- WhatsApp: +64 22 093 0661