How to Get the Best Value from a Rental Property

Every person that invests in property naturally wants to gain maximum benefit and value from their investment. Not only do they want an investment property that will enjoy solid capital growth, but also one that is consistently tenanted by people who care for it as if it were their own.

Property investment can at times seem scary and foreboding as investors need to select the property that they will invest in wisely and with the future in mind. However, it is reassuring to know that there are a number of things that can be done to ensure that you do enjoy good value from properties that are rented out.

Invest in the right location:

When embarking on the purchase of an investment property, thorough research and analysis is pivotally important. Although there are a number of important factors to consider, some of the most important are:

  • The vacancy factor – How likely is it that you will have periods where your property is without tenants? Alternatively, how sought after are rental properties in the area and is demand expected to remain strong?
  • Capital growth prospects – Is the value of your property expected to increase over time? Be aware that there are some situations and property types that have shown less capital growth than others and as you want to ultimately make money from your investment property it is important to know whether it is predicted to steadily increase in value.
  • Proximity to shops and services – Properties that are well located and in close proximity to shops, transport, schools and other services will always be attractive to renters. It is a huge advantage if your investment property is within walking distance of public transport as this provides your tenants with the option of not running a car or making considerable savings on petrol and parking costs.
  • Knowing who your tenants are likely to be – Get to know the area well and find out who your tenants are most likely to be. For example, if there is a good chance that they will be students, you could narrow your search to properties that offer good access to universities and colleges and are within the rental price range that many students would expect.

Invest in the right type of property:

When you are looking to invest in property, there are obviously a range of property types to choose from, including units, flats and houses. Some investors decide on a property type that is successful for them (for example semi-detached houses) and build their portfolio predominantly with properties of the one type. It could be argued that investing in this way allows you to build your knowledge of a particular property type so that you understand ways to enhance its value and make it attractive to tenants.

In contrast, other investors opt to include properties of varying types in their asset base. This strategy allows the risk to be spread so that if a certain property type becomes less sought after by renters or one property type appreciates less than others, the negative effect on the property investor is likely to be less severe.

Being aware, educated and understanding the market is critically important if a property investor is to get the best value from a rental property. When an investor has done some research and analysis of the areas and property types that are set to enjoy ongoing capital growth and those that are most sought after by tenants, they are best placed to own an investment property that provides them with increased profit in the long term.

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