I thought it would be beneficial to outline some points of difference between Apartments and Houses from a Property Management perspective.
It’s important to do your homework for any purchase. Research the area you want to buy in before committing to buy and ask lots of questions. What types of people are renting there? What does the area look like? Is it full of crowded streets with cars parked all over the nature strip? Are most of the houses in good condition? Is there any graffiti? All of these things are an indication of what you can expect.
For apartments it’s a little different but the basics are the same. Who lives there? Is the building in good condition? Is the entrance clean and all the lights working? What sort of security is present? Are all the lifts working? These things point to an effective Owners Corporation.
If you are looking at houses in newly released suburbs then there are a different set of issues. More than likely there is no infrastructure as building outpaces the local government’s ability to provide it. For example, there may be no regular public transport in place even though there will be plans to have it in the future.
So, in effect, it becomes a waiting game for buyers and tenants until the infrastructure catches up. Investors normally look to future growth for increases in the total pool of prospective tenants, knowing this will create demand. Getting a tenant to live there while there is no transport or schools for example may mean offering a lower rental as a form of incentive. Be brave though, because if you look at the bigger picture, it’s clear that having a tenant is more important than holding out for the highest possible return.
On a positive note, experience tells us that slow rentals pick up over time and it’s important to consider that when setting the initial amount. Lower rent encourages a tenant to commit and most tenants will tolerate increases over time.
Remember, any rent is better than no rent!
Apartments are like vertical suburbs. There are a lot of people living in the one confined space and just as in any suburb, there will be people moving in and out. However, apartments are subject to a unique problem because there can be multiple apartments available in the same building for lease at any one time. Regrettably, this makes looking at a number of options easy for a prospective tenant and counterproductive for the owner.
As with most things, the end product is important. In this case the building and its amenities are very important for tenants. Security for example is something that crops up time and again for people looking at apartments. On that basis, apartments with a Concierge can be very appealing. The availability of a Pool, gym facilities and small touches like a laundry service or on site security after hours also make living there more enjoyable.
An apartments layout is also crucial because they tend to be smaller and to compensate they pack in as much as they can which may lead to a cramped living space.
For houses being built in a newly released estate there are a different set of issues. Obviously not all the houses in the estate finish at the same time so there is the added problem of living in an area full of trucks, dirty roads and noise from construction vehicles. In summer it’s dusty and in winter it’s muddy and unfortunately it will continue for some time until the estate is fully developed.
The disruption this can cause when properties are open for inspection usually results in a need to reduce the asking rate. It makes sense to take this into account when the initial lease is set up.
On the other hand, apartment buildings are finished and complete when rentals begin and people move in. Moving in is a different experience for houses and apartments too. Most apartments only have certain days on which you can move in or out and you are allocated a certain time to get it done, whereas you have complete control over the moving process with a house.
Something to consider during any vacancy for both Houses and Apartments. Think about giving the property a bit of a tidy up. This could be as simple as changing the light globes to energy savers, or attending to a dripping tap, freshening up the garden or even having a security door installed. You know, it’s amazing how important a simple security door can be to a tenant.
I may be stating the obvious but each property is unique. How successful your investment turns out to be rests on a number of variables. What a professional Property Manager brings to the table is stability to the complex process of owning an investment property.
For your own peace of mind, separate your investment world from your private world by using a Professional Property Manager. To find our about how the Investors Direct Property Management team can help you visit our website or contact us at firstname.lastname@example.org