Buying a rental property? Things to consider
Crockers | Reading Time: 3 Minutes | November 2019
What makes a good rental property?
If you are thinking about buying a rental property, there are many important things to consider.
This article will discuss what makes a good rental property
Understand Your Ideal Potential Tenant
The “perfect rental property” will look different for every property investor.
However, this will mostly be based on your ideal tenants.
Before you start looking for a rental property to buy, think about who you want to live in your property.
- Do they need multiple bedrooms or is it someone living alone?
- Will they need access to public transport or do they live out in the suburbs and drive to work?
- Do they have kids?
- Are they in a big city and need an apartment, or do they live in the regions and prefer a small lifestyle block?
Considering these factors will help you plan a checklist when you start looking.
Rental Property Legal Requirements
You should also know what is legally required to turn a property into a rental.
This is especially relevant with all the new Healthy Homes NZ policies that came into effect on July 1st 2019.
These regulations aim to improve the health of New Zealand renters. As a landlord it will be your responsibility to meet all legal requirements.
Under these new laws, rental homes must meet minimum standards for heating, insulation, ventilation, moisture and drainage, and draught stopping.
Unless you have money to update the house in a huge way, it is better to invest in something that already meets basic rental property requirements.
Location, Location, Location
Location is always one of the first things you need to consider when you buy an investment rental.
Here are just a few things about the neighbourhood that you should be considering:
- Does it suit your ideal tenant? For example, if you want a family to rent, is it in a good school zone? Or fully fenced?
- Are there a lot of vacant rental properties? This could indicate that it is not a good place to buy into.
- Check what the average housing and rent prices are in the area
- Is it a growing suburb? This could be a good place to start if you have never invested in a rental property before because you can buy it cheaper now and expect growth in the future
When you are considering the location, you also need to consider the market rent value.
The neighbourhood is just one more thing to evaluate when you’re thinking about the ideal tenant who will live in your rental.