Tips for Building an Investment Property
Investing in real estate can be a daunting thought, particularly when you’re looking at purchasing an existing home. You may end up with an older home that needs a lot of renovating, meaning you won’t be able to rent it out and see a return on your investment for a number of months, or you may find the area you want to invest in either isn’t affordable or doesn’t have the types of homes that would suit families looking to rent. The solution may be building an investment property from scratch instead so that you’ll get a brand new home that’s move-in ready for tenants. By working with a building company from start to finish, you’ll have a qualified builder constructing a beautiful new home, and you’ll also have a team of staff overseeing the project from the initial discussions right through to handover. Take a look at our tips to help you before you embark on your investment property journey!
Choosing a Location
- Do your research and invest in an area that has good growth potential, rather than very well established areas that are more expensive to purchase in.
- Areas with new estates being built close to new amenities such as shopping centres, new schools, hospitals, and public transport will be worthwhile to invest in because they’ll be in higher demand with renters.
House & Land Packages
- Consider purchasing a house and land package rather than a home that needs to be renovated. Building companies will often have house and land packages ready to be purchased; they can direct you to the land sales agent and then using their own design commence building your home once the land sale is finalised.
- The home design has been carefully planned to suit that particular block of land, so there’s no additional work for the buyer to find an architect to design the home, meaning there’s no delay in commencing the build. This is especially beneficial for blocks of land that are more challenging for builders, such as ones with a slope. The builder will be familiar with the land and will have planned the design accordingly.
- You’ll save thousands of dollars on stamp duty because the home hasn’t been built yet, so there’s just the land tax to pay, leaving you with more money to allocate to other areas of your new home, like interior styling or landscaping.
Dual Occupancy
- With so many suburban areas favouring a shift towards high density housing, you’ll have the option of building townhouses or a duplex for dual occupancy. You’ll get double the return if you choose to rent out both dwellings, or if you’re looking to downsize or get your foot in the door of the property market, you can live in one home and rent the other out.
- Dual occupancy builds also have a higher claimable depreciation value, which is immensely beneficial to the owner.
- The property can be negatively geared for tax purposes to grow in value over time, which is ideal for a property investor. Remember it’s always best to chat to your financial advisor before embarking on a property investment purchase.
A Finished Home
- Building companies will often base their pricing on providing the client with a complete home inside and out.
- Fixtures and finishes are included in the cost, and client has the freedom to choose their desired interior finishes based on ranges included in the cost of the build. You can also choose to upgrade and invest in higher end finishes to appeal to renters. You’ll get a brand new, stylish home to rent out without the costly stress of renovating an old home.
- A newly built home can be designed and built to be as energy efficient as possible, meaning the cost of utilities will be more affordable than an older, existing home, which will appeal to renters, particularly larger families.
For investment property home design ideas, including some great duplex and dual occupancy options, head over to the Hotondo Homes website.
