Building an Investment Property

Home & land is one of our specialties here at Hanson Property.

A large part of that is helping investors - from buying a block, right through to the completion of their home and renting it out.

How? We come with you along the journey, providing up to date market analyses along the way, including recommending finishing trades and contractors.

The rental market today is strong, with high demand and low stock levels to supply it. So, there’s never been a better time to consider investing.

If you’re new to the game and not sure where to start, here’s some important things to think about along the way.

Investment & Financial Objectives

One of the biggest considerations is always - money, money, money, money…money! Chatting to your accountant is always a great place to start if you’re not familiar with property investments.

Some other things to consider are:

• Budget – if necessary, chat to your bank or broker and see what you’re able to borrow and set a budget.
• Depreciation Schedules – chat to your accountant about how the depreciation of your investment property may be claimed at tax time. To help with this process you’ll need a Depreciation Schedule prepared by someone like Deppro or BMT Tax Depreciation . Use these links to check out how much a report might cost.
• Maintenance costs – these should be minimal in the early years as everything is brand new! However, ensure you understand what may or may not be claimed at tax time. Also think about what maintenance you might need to undertake each year for example, gutter cleaning, garage door servicing etc.
• Income – get a market estimate on rental income so you can make sure your investment is viable.
• Objective – ensure you have a goal! Are you building the investment to rent out for the long term, or are you wanting to rent it short term and then sell for a profit?

The Finishing Touches

Don’t overcapitalise! Remember, it’s not your dream home so there’s no need to go for top of the range. Somewhere in the middle is where we recommend.

Do your research on the different home & land package options and really understand what the package with your builder does/does not include – don’t be afraid to ask questions!

When your tenant moves in, the home will need to be complete from the road to the back fence. There are some features that might not be included as part of the build, unless you’re buying a ‘Turn Key’ package with all the bells and whistles.

It is important to consider and, if necessary, budget for things like:

• Landscaping – to both the front and rear yards (including down the sides). If you’re buying a new block in a land estate, like the lots we sell in Vasse, then you might get a contribution to your front landscaping.
• Fencing & gates – again, buying from a Developer in a new land estate, boundary fencing packages are common and another great help. But make sure you check out whether that includes gates or returns from the boundary into the home as the property needs to be secured when your tenant moves in.
• Air conditioning & solar panels – these are not essentials, but it can help increase both the rental return and the eventual sale price.
• Letterbox – this is an essential item for a tenant to receive their mail, this doesn’t need to be anything fancy however practicality is a must!
• Clothesline – an item most tenants will consider a necessity, installing a clothesline prior to renting your home out ensures the home is user ready when a tenant moves in.
• Dishwasher – this is totally optional too, but important to consider when thinking who your tenant might be…

Who will be renting my property?

There’s a raft of home design options you can choose from. It’s great to have such a broad selection, but to help you in the decision-making process it’s important to consider what tenant you might be seeking when the home is complete.

For instance, a small family would likely prefer a design that has two living areas and is close to parks or schools. Professionals, downsizers or young couples typically seek higher end finishes and features, and often low care homes on smaller blocks in a convenient location.

Get to know the demographics of the area that you’re looking to invest in and be sure to factor that into your design process. That’s where partnering with a local agency early on comes in handy!

How much rent can I get for my property?

According to Reiwa, Busselton was sitting at a 0% vacancy rate as at December 2021. That is a record low for the area and shows that demand is certainly higher than stock available to the market!

As an example, the median rent for Vasse was $540 per week in January 2022 according to Core Logic. This $90 higher than Perth metro, which was reported at $450 as at December 2021.

For a tailored appraisal for your investment, get in touch with us.

How much does is cost to have my property managed?

We’ve got a couple of different fee options to suit a variety of needs. Investing in a good Property Manager takes the stress out of owning an investment property and running costs like that can usually be deducted at tax time.

Property Management is one area you don’t want to scrimp on with your investment. Get in touch with us today on 9755 8234 and we can chat through our fee options, and even tailor a solution for your needs.