One thing that can
be said about real estate; there will always be a demand for accommodation,
even more so in specific locations such as cities and their suburbs, and if you
are thinking about getting into the rental sector, there is much to consider.
Crunching the Numbers
This is the first step that will help you make an informed decision, and whether you are looking to acquire a condo, apartment or house, calculate the cost of buying and renovating to make it acceptable for rental. This would include:
- The price of the real estate
- Legal fees and stamp duty
- Cost of property renovation
- Cost of furnishing
When you have done that, then you can look at projected rental for certain locations, with a realistic estimate of the rental you can charge, then you have a clearer picture of the project. If you would like some idea of the rental for a serviced apartment in Melbourne, for example, check out what’s available at https://platinum-apartments.com.au, a leading property management and apartment rental specialist.
Location is Everything
While you might be able to buy an old property in a rural area for a very cheap price, this is not prime rental territory, rather you want a location that is close to the city and has all the amenities in the local vicinity. Buying an apartment in Melbourne would likely give you a good return and if you joined forces with an online company that connects landlords and tenants, you can expect to enjoy many bookings, plus rentals in Melbourne are at the upper end of the price scale.
Long or Short Term?
You need to decide whether you are targeting short term holiday tenants or professional people who are looking for a 6-12 month lease, and both have their pluses and minuses. Airbnb offers a platform, or you could connect with a local property management company who would source tenants on your behalf. There are companies that handle serviced apartments and they would manage your unit and rent it out to suitable tourists, which should give you a steady income.
Research Land Prices
Prior to deciding where to purchase real estate for property rental, you should carry out some research, looking for a popular area where land prices are at the upper end of the scale and a desirable area that is in demand. If you can find a suburb that has yet to be fully developed, this might be the best time make a purchase and if the future development works out, you could be looking at a very good return.
If you do your research, buy wisely and join forces with a reliable property management company, there’s no reason why you can’t make money out a rental property. Without a management company, you would spend most of your time overseeing the management of the property, much better to make use of the wide range of services they offer for landlords, leaving you free to enjoy life.