When embarking on building an investment property, being well-informed to make the right decisions from the outset can significantly impact your return on investment. Here are our top five considerations to ensure your project is both profitable and appealing to prospective tenants.
- Location
Where you’re building is paramount. According to Jaime Pratt, Head of PM at VPM, the right location can truly enhance the value of your property and its rental appeal.
“Consider areas with strong rental demand, accessible transport links, and proximity to local amenities like schools, shops, and parks,” she says. “It’s a great idea to research future infrastructure projects, too, as these can boost the desirability of the area and, subsequently, the value of your property”.
- Target Market
Understanding the needs and preferences of your potential tenants will significantly help guide your design choices. For instance, young professionals might prefer modern apartments near the city centre, while families could look for spacious homes with storage and gardens in suburban areas. Tailoring your property to suit your audience can lead to higher occupancy rates and rental income.
Jaime advises that the design and layout of your property are crucial. “Focus on creating functional, attractive spaces that are easy to maintain. Open-plan living areas, ample storage, and good natural light definitely make any property more appealing than another,” she says.
“Energy-efficiency and sustainable building elements are also increasingly sought after and can add value, reduce running costs, and attract environmentally conscious tenants.”
- Budget
When considering building any property, it’s essential to know your budget restrictions. Jaime suggests establishing a clear budget that covers all aspects of the build, from land acquisition and construction costs to fees for architects, engineers, and council approvals. “Also, be sure to factor in a contingency fund to cover unexpected expenses. Keeping your project within budget without compromising quality is essential for maximising your investment.”
- Workmanship
Engaging the right professionals who understand your vision and goals can make all the difference. Jaime recommends working with experienced architects, builders, and property managers who can streamline the building process and ensure your property meets all regulatory standards. “Quality construction and finishes not only boost the appeal of your property but also minimise maintenance issues down the line.”
- Maintenance
Consider how many years you plan to own your investment property. The long-term maintenance and management of an investment is often under-prioritised by investors and really needs to be considered from the outset. “A well-maintained property will retain its value and continue to attract tenants,” Jaime explains. “Regular inspections, prompt repairs, and proactive property management can prevent small issues from becoming costly problems. Hiring a reputable property manager can reduce the stress of day-to-day management and ensure your investment is well cared for.”
Building an investment property is undoubtedly a substantial commitment. With strategic planning, attention to detail, and the right support, your investment property can become a lucrative addition to your portfolio – a valuable asset that provides steady returns.
For qualified advice to help you make well-informed investment decisions, contact our experienced team at VPM today.