If you want to make money like a professional investor, you need to know what – and where – to buy. Fortunately, we’ve compiled this expert advice to help you focus on buying the best apartment in the street!
1. Choose the right type of apartment
Do some research and find out what local renters desire. Are two bedrooms/two bathroom units highly sought-after in the area, or is off-street parking more valuable than a second bathroom? “A tenanted property means a reliable income stream, so ensure that your property suits the majority of tenants in the area,” says Chris Gray, CEO of Empire, which builds property portfolios on behalf of other investors.
2. Get the location right
“Properties that are close to the CBD, beaches, schools, public transport and leisure facilities are more likely to grow in value,” Gray says. “Go for median priced urban properties in inner suburban suburbs, 5 to15 kilometres from the CBD.”
3. Look for smaller blocks
A small complex with a high ratio of owner-occupiers is a great place to park your money, as owners will generally look after the day-to-day running of the block more carefully than renters will. They will also ensure the common property is maintained and you’re more likely to have a proactive executive committee.
4. Create instant equity
Quick, low cost renovations can have a huge impact on your property’s value. “For each dollar you spend on renovating, you should aim for at least $1-$2 back in the value of your property,” Gray says. “Renovate your apartment to manufacture instant capital growth and maximise your rent. Use a valuer to ensure you don’t under or over capitalise.”
5. Get an independent valuation before you buy
“Buyers can get emotionally involved when buying property and risk paying more than the property is worth,” Gray warns. “Through an independent valuation, you can almost guarantee you will never overpay.”
6. Join the strata committee
Be an active investor! Get on the strata committee to see what improvements you can make to the building. By joining the executive committee, you can be involved in decisions related to repairs and maintenance. “Rendering is a great way to protect the building from the elements and present a smart image,” Gray advises. “Consider replacing rusty balconies with new glass ones, or you may even be able to add another level and build out to the rear.”