The Five Big Priorities For Property Investing In 2023

Will 2023 be the year where you dip your toe into property investing? The numbers suggest that we’ll see several people take advantage of the correction in the property market to buy up property when it’s relatively low-cost to do so.

Of course, the rules and priorities are a little different when you’re looking for an investment property, rather than a place to live in yourself. Inexperienced investors can get caught up in looking for the wrong things and end up making an investment that ultimately disappoints them.

When new investors come to Hello Haus for help with making that first big investment, we always tell them to focus on five priorities, as these will have a significant impact both on the revenue that you can generate from the property, and its long-term value:

1) ? ? Buy in a growth area

Too often investors make the mistake of buying investment properties that they can find cheaply, with little regard to location. Instead, you should follow through the same process that you would if you were buying a property to live in, and look for areas that are set for high growth, with future deployment planned to add schools, public transport, shops and so on. Not only will this be positive for the value of the property, but you’ll have more tenants that will be competing for property in a growth area.

2) ? ? Have the right asset selection criteria

There are several features that renters typically like to see in an apartment, townhouse or rental home. These include:

-? ? ? ? Low levels of public housing in the block/area.

-? ? ? ? Good access to natural light and natural ventilation.

-? ? ? ? Open spaces for recreation and aesthetics.

-? ? ? ? Noise controls (this is particularly relevant in apartment buildings – noisy neighbours that can be easily heard through walls are a big negative to renters).

-? ? ? ? The right floor plan/balance of rooms and common areas.

Ultimately, think about what it might be like to live in the apartment or building yourself. If it’s a pleasant experience, then the chances are higher of finding stable, reliable and long-term tenants.

3) ? ? Will you be able to get tenants in fast?

First, look at whether the old leases will be out of date soon, so you can prepare the property for tenants according to your own selection criteria. Then look at whether there are some inexpensive cosmetic upgrades that you can make, quickly, to increase the rent while still getting new tenants in as quickly as possible – you will want your investment property (especially if it’s your first) to be making money immediately.

4) ? ? Is there the ability to manufacture equity into the property?

Is there room to renovate or add extensions to the property to increase its value and earning capacity significantly? This is one reason that we often warn against apartment buildings, even in premium locations. Depending on the body corporate and building rules, you may be severely limited in what you can do to improve the property, even within its existing walls.

5) ? ? Is there a development upside to the property?

Is there enough land on the property to create a sub-division, add a granny flat, or a second or third floor to the building? If you’re able to do these things, then you’ll be able to bring in additional renters over time and accelerate the revenue the property earns.

In short, make sure you do your research first! As we advise clients that come to us looking for assistance in sourcing a home to occupy, your goal when looking for an investment property should be to acquire only top-tier stock. This means you should identify the area of opportunity and then spend the time it takes “on the ground” researching the area, meeting with agents, and attending inspections to develop a real-time understanding of the area and the property available in it.

From there you should be sourcing off-market opportunities to ensure that you’re ahead of the curve and get the first bite at the cherry.

These are all best practices that we cover in our Get Buyer Ready course. For more information, feel free to reach out to the Hello Haus team. We have helped dozens of investors, of all skill levels and experience, make the most of their investments.