I’ve been looking at property recently, specifically older units, and I can see that they’d make good investments – they’re usually contained within a solid building, they’re more spacious than today’s units and they’re often in good areas close to the city.
BY VANESSA DE GROOT
Looking at these units I think that they’d make a good investment for the aforementioned reasons. I also think that if you’re buying an investment you generally don’t want the property to be top of the line because tenants may not treat it as they would if they owned it.
My concern, however, is how rentable they are. They might be in good locations, close to the city, but are they nice enough inside?
Personally I look at some of them and think ‘I wouldn’t want to live there’ and I’m wondering how much attention I should pay to that little voice in my head.
I think I’d rather live further away from the city, in a more inconvenient location, to live in something that’s more luxurious inside, but do other people feel that way?
I think perhaps not. It seems that for most people proximity to amenity is the main consideration when buying or renting a home. A recent poll by PRDnationwide found that proximity to public transport is the most important amenity for homebuyers, with 57 per cent indicating it was their priority. Having a supermarket nearby was considered to be of primary consideration for 16 per cent of respondents, while 12 per cent wanted a restaurant or café nearby.
Does a property then just need to be ‘decent’ if it’s in a good area?
And what about the outside of the building? Does it matter if the outside is looking a bit old and unstylish? If the inside is nice and has had a nice spruce up, would that be enough to entice potential buyers down the track and renters in the meantime?
Tell us what you think. How important is the standard of living of a particular property when it comes to attracting buyers and renters?
Vanessa De Groot is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au
A good friend of mine just purchased a 2 bedder on the top (fourth) floor in a block of 20 units, abt 50 years old. It’s walking distance to Fairfield train station (NSW), to shops etc. Her rental yield is amazing, 6.5%! This unit is in good condition (it was owner occupied previously). Tenants didn’t seem put off by the graffiti on the exterior of the block, graffiti is quite common in Fairfield, NSW. It would appear that so long as the unit is “decent”, tenants are more concerned abt affordability, public transport & amenities.
Comment by May — June 9, 2011 @ 7:25 am
Spot on May, the rental yield in the west can be very appealing. Its been known (some areas) as a stigmatized part of Sydney, unlike the yields in relation to the capital outlay in certain suburbs close to the city the burbs as we know them present very good value provided you undertake your research and thoroughly pursue all avenues. Although the vacancy rates are creeping up nationally at 1.8% and 1.4% in Sydney you generally can’t go wrong with purchasing properties which are in correlation with the average populations income. With regards to purchasing any investment which has been existent for some time you have to carefully consider the pros and con’s regarding deprecation.
Cheers
Comment by Rosco — June 14, 2011 @ 10:12 pm