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What to look for in a rentvesting apartment
Rentvesting demands potential property investors think more strategically about their purchases.
What to look for in a rentvesting apartment
Rentvesting demands potential property investors think more strategically about their purchases.
Rentvesting is on the rise, but there are a few things you’ll want to consider if you’re looking at doing so with an apartment.
“Rentvesting allows FHBs to take advantage of low-interest rates and get on the property ladder, while still giving them the option to live in an area they love,” Homeloanexperts.com.au CEO Alan Hemmings told nestegg sister publication Smart Property Investment earlier this year.
Mr Hemmings argued that rentvesting is the right fit for many young Australians because it allows them to maintain their lifestyle and take advantage of the job opportunities that cities can provide while also adding an investment property to their portfolio.
“For buyers who have access to a deposit and are ready to buy, rentvesting gives them an achievable way to get on the property ladder,” he said.
If you’re one of those younger Australians looking to take a crack at rentvesting, there are a few things you’ll want to look for in an apartment.
Upside Realty director of sales James Kirkland told nestegg that would-be rentvesters take a close look at the demographics, wants and needs of potential tenants ahead of time.
“Ask yourself if this is a region of popular city workers or commuters, and therefore have access to transport to provide that,” he said.
Even seemingly small details like the size of the bedrooms, whether or not an apartment offers air conditioning, and the inclusion of walk-in wardrobes can make a big difference when it becomes time to rent the apartment.
“Other factors include if the building does or doesn’t allow pets should a housemate want one, [and] if more than one parking space is available, does it have enough storage as well as enough space for flatmates to comfortably reside together or extra facilities for entertaining,” he said.
Speaking to nestegg, Aussie Home Loans senior broker Peter Corta emphasised the importance of research for those considering rentvesting.
“It’s worth crunching the numbers or asking your mortgage broker to do it for you, to be sure that rentvesting makes sense financially for you,” he said.
Given that the rental income that your investment is capable of yielding is one of the biggest variables, Mr Corta said that potential rentvesters need to fully understand how much rental income you could receive from the investment property.
Long-term trends around vacancy rates can also help give you a better sense of how desirable an area is for potential tenants.
“No matter how strong the rental return is, you need to factor all the expected and unexpected outgoings of your investment property, such as insurance, maintenance, council rates, strata payments, and loan repayments, while bearing in mind that you’ll still have your own rent to pay,” he said.
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