At some point in your property investing life you will find yourself without a tenant. At that moment you will realise that any prospective tenant is going to be comparing your property with similar properties in the area.
What can I do to make my new investment property stand out from all the other properties being built around me? It’s a good question and perhaps one that many landlords will struggle with.
New estates especially tend to have a number of properties ready for the market at one time. Land gets released and properties are built and completed in around about the same timeframe by builders all competing for the same market. Or are they?
It’s easy to fall into the trap of thinking every property for sale is going to become an investment property and be in competition with yours. But it’s not really the case. Most areas have owner occupiers as well so only investors will actually be competing with you. On that basis, let’s address what you can do to make sure your property appeals to the most number of tenants.
To understand how to keep ahead of the other investors you have to have an understanding of what a tenant wants. It’s crucial that your property has appeal to the ones that matter the most, the tenants.
To achieve this we can start from the end and work backwards. Keep in mind that some investors may buy to a budget. They try to get the cheapest product, cutting costs and features, substituting no name appliances, inviting maintenance issues and unhappy tenants. A cheap house invites tenants with a cheap mindset. To be a standout you have to do something different.
So how can the cheap house syndrome be avoided?
First, make a list of features that a tenant would want. Things like security doors, ceiling fans, dimmer switches, deadlocks, an alfresco, quality landscaping front and back, lock up garage with remotes with an indoor switch to open it without the need for a remote. Other things to consider may be double glazing for privacy, room for a side by side fridge, outdoor security lighting or maybe a bathtub for tenants with babies or small children if the property is a Unit. Is the whole property user friendly or low maintenance? Are you making it easy for the tenant to look after the property?
Notice that nothing on this list is expensive. These are simple things can make your home stand out to a prospective tenant and they add Rentability.
Did you know that the extras you add now will probably be standard fitout for new properties in five years’ time? Think about future proofing your new property so it can compete with properties that haven’t even been built yet.
The list you make should be your default features. Then you should look at how big the property is going to be. Will it be a four bedroom or three?
Only after you have decided on what the building should contain do you need to consider price.
The aim here is to provide a product that is inviting and has added features that others lack.
A fully loaded property will appeal to more people, creating demand and in return, higher rent. Property investing is a long term activity and limiting your selection to a sparse, unappealing low spec home will impact future values. You are almost forcing yourself to accept lower rent because it won’t be competitive with others, let alone remain competitive with the newer styles that will come along.
By the way, there is nothing stopping you from adding features to your existing properties either. Listen to what the tenants are saying. Ask your property manager to discuss any improvements the tenant might like. Ceiling fans and security doors can be added with a minimum of disruption. Outdoor security lighting is also popular. Perhaps freshen up the garden on a regular basis, such as topping up garden beds with new tan bark each year. Small things like this can make a big difference. If summer is approaching perhaps ceiling fans would be appreciated more than new tan bark.
The more you can add, the more you differentiate your property from the average properties surrounding you. Notice I didn’t say to add them all at once either. Budget to add something extra every financial year and any addition will be tax deductible as well. Above all, consider the reasonable needs of the tenant. Remember, other properties can advertise for lower rent but a high spec property will attract more enquiry and, as we know, increased demand increases rent.
The more you future proof your investments the less competition you can expect.