Are you an investor whose primary concern is to earn income, that is income less expenses? Then, here are the things you care mostly about: the rent you are receiving, the body corporate fees, the rates, and any other outgoings. Below are specific details you need to know to make sure you are putting your money into an income-generating apartment.
1. Which type of apartment is the best?
If you are an apartment buyer and want to become a successful income investor, the best types of apartments to invest in are the smaller ones. Ideally, you should buy properties that are below 50 square meters as they give higher returns particularly those that are below 40 square meters.
2. Why smaller apartments are better?
The obvious reason is that smaller ones are easier to rent than larger ones. As an owner, it’s much more difficult to find tenants for a large apartment with many rooms. Naturally, you need to look for a family or a group of individuals who want to live all together or you will have multi-tenancies who prefer home-sharing.
Secondly, apartment size is an important criterion for bank lending. Banks have certain restrictions on apartments that are below 40m2.
Smaller apartments are most often income focused and buyers need to deposit at least 50%.
All these simply mean all your other occupiers are taken out since they cannot afford either the 50% deposit or the fact that no bank would give what they need. Most of the owners of smaller apartments are investors which is perhaps the reason why they are categorized as investor apartments.
3. How do you measure the true value of your chosen apartment?
With the many sales methods used these days, it can be a really challenging task to find the true value of the apartment you’re looking to invest in. The most effective way to accomplish this is through an apartment valuation tool which uses real world sales data and assess the property based on its current condition along with other important factors such as location, size, number of bedrooms, accessibility, amenities, general atmosphere, as well as the distance from city services and other basic landmarks.
Having enough money is not everything to becoming a successful investor. You also need to be an educated and a well-informed buyer. To become such, you need to do research and check out reputable websites that offer various tools, guide, and updates on apartment selling and buying.