Building for Investment vs. Residence
There are a number of considerations to take into account when building a home for investment purposes.When living in your own home you will care for it more so than a tenant would.Therefore when selecting the finishes for your investment, you should take a long term view on how each element of the home may suffer from wear and tear.As an example; tiles in the living areas may be a better alternative to carpets, as they will not wear and/ or become stained.
A common mistake that investors make is building an investment property that strictly suits ‘your’ purposes.The ‘would I live in it?’ approach is not always the best rule of thumb.There are a number of different tenant types that many people do not consider when constructing an investment home.
The location of the investment property may also factor when determining the number of bedrooms, bathrooms, living areas and car spaces.For instance when located near a university – plenty of bedrooms, bathrooms and off street car spaces are a good idea to cater for student share accommodation.Another example would be an investment property in a family orientated location benefiting from a second living area in lieu of a third bathroom.
To achieve long term flexibility, designing a home that ticks boxes for both investors and owner occupiers is usually the best bet.This way, when the time comes to sell and capitalise on your investment, not only will other investors will be looking at the property, though owner occupiers will also be in the mix.Increasing the number of buyers vying for your property is a good thing.
Another consideration is whether to build a unit or a house.Properties that do not have a body corporate or common facilities can typically be more valuable on the market as there are no body corporate fees and having 100% ownership of the land is very desirable in the long run.
Why build an investment property vs. buying new
Being able to select the house design and the fittings and fixtures is a critical part of investing in property.Being able to make minor tweaks to the house design can make a big difference in how desirable your house is to perspective tenants.
If you purchase a property that is suited for the owner to live in, you may be end up with an investment that costs a small fortune in frequent repairs.It is best to start from scratch, to make sure that you are getting exactly what you need in an investment.
How do I maximise my return on investment?
A good way of maximising your return on investment with a new investment home is by designing and selecting the fixtures and finishes in conjunction with your builder.This will ensure that you are delivered a low maintenance investment that will require less maintenance costs in the long run – which will maximise your cashflow and enhance sale price of your asset.
Which builder should I use?
Not only should you choose a reputable builder that can deliver, you should also select a builder that is experienced in building investment homes.Selecting a builder that has a specialty in not only building investment homes, though is also adept at selecting the appropriate fixtures and fittings that will ensure the longevity of your investment is paramount to the overall success of your investment.