This is the second part of our 'Questions To Ask When Buying An Investment Property' series which covers some of the many important questions you should be asking when you're considering buying an investment property.
In this second article, we look at the practical questions that need to be answered - and whilst something relatively minor like a missing garage remote may not be a deal-breaker - it's imperative to have a grip on as many aspects of the property as possible to ensure that the property will be ready to rent as quickly and as economically as possible.
As you know, an investment property should ideally be listed on the rental market as quickly as possible in order to maximise the returns. Time is money and any delays for renovations, improvements or for compliance purposes could be costly in terms of lost rental income. Buying a property that's in need of some upgrading may be worthwhile from a capital gains perspective, but it's important to understand the consequences of doing any building work - not only from the cost of the work undertaken but from the cost of lost opportunities too.
To establish the property's tenant-readiness and to understand what upgrades may be required, these are just some of the questions you should be asking:
- If there's a remote-controlled garage or gate, are there sufficient remotes and are they all in good working order?
- If there is a pool or spa, does the fencing comply with legislative requirements?
- Do the gas and electrical installations comply with current safety standards?
- Do all the windows and doors have working locks or locking mechanisms - and are all the keys present and in order?
- If you are going to market the property as a pet-friendly rental, does it have appropriate fencing?
- What condition are the appliances, such as the heating or cooling systems, reticulation, hot water systems, pool pump and filter in?
- Are there any visible areas which may be hazardous to tenants' safety such as uneven paving or unstable fencing that need to be fixed?
- If there's a garden, has it been well-maintained or will you need to spend money getting it cleared up and looking good?
- How old are the property's electrical and plumbing systems - and would they need to be redone? (A building inspection by an independent building consultant is highly recommended).
- Has the property been checked for rising damp or water leaks?
- Is the property's termite protection up to date?
- What fixtures and fittings are included in the sale? (Items such as pot plants, lawnmowers and pool and garden equipment can be an added bonus at sale time).
- If renovation work has already been done on the property, are the certificates of insurance and builders' warranties available?
If the property is currently being occupied by tenants, it's worth asking about the current property management arrangements. Property managers can provide important information about the property such as vacancy rates, maintenance history, any issues with neighbours and so on and it can be very helpful to have a discussion with the property management company before committing to the purchase.
Whether or not you manage your own investment property or appoint a property management company is a personal decision - but it's worth noting a good property manager should be able to minimise vacancy rates and have reliable processes in place that ensure the property is well-maintained and that repairs are kept to a minimum.
If you're thinking of buying an investment property and want personalised service and over 60 years of experience in real estate and property management in Perth, then you should think Time Conti Sheffield. We're a family-owned and run business with an extensive portfolio that includes residential and commercial property management, land subdivision and apartment project marketing, residential sales and rentals and commercial sales and leasing and if you call us on 08 9362 5333, you'll find experienced property professionals who truly want to help you find all the answers to your investment property questions.