In this month’s blog, we wanted to share some insights into what you should be considering when buying a new build as an investment property. There are some good incentives to buy new with the tax advantages the government has announced but what else should you be thinking about?
Here is a list of things we feel should also be considered before purchasing:
· Location and position – What school zone is the property in zone for? How is the property positioned in the development? Will it get good sunshine which helps keep the home healthy?
· How many bedrooms does it have? – The most favourable rental is and always has been a 3-bedroom home. It caters for a wider range of tenants. Do your due diligence and understand the demographic of people who live in the area you are buying in to know what size home will be most desirable.
· Living area size is important when you think about how they are expected to live in the home. A lot of new builds have smaller bedrooms so if they are all in the living room will it be adequate for the size of the family expected to live in it. Does this extend to an outdoor living space as we know kiwis love to enjoy indoor/outdoor living?
· Does it have a garage? A garage adds value and $$ and is an extra storage space for families to utilise. So many new builds are being developed without a garage and very limited parking. Think about how your tenants can live in a property without car parking facilities. How close is the public transport?
· Storage– as mentioned above without a garage what storage is there for them to use? Is there enough cupboard space and wardrobe space built into the design? Have you provided a garden shed? Think as if you were to live in the space – where would everything go?
· Did you know that 64% of kiwi families own at least 1 pet? Based on those statistics is your property suitable to allow for a pet. We are seeing more and more landlords open to allowing pets as they are an important part of the family unit. This is a positive to consider for any rental property.
· What covenants apply to tenants – we see some places stipulating no washing can be hung on patios or balconies. Are the covenants going to appeal to a tenanted property?
· Lastly what warranty does the new build come with? Make sure you ask the developer to supply the Healthy Homes Certificate of compliance, as they should be built to comply if they are being sold to investors, however this isn’t always the case.
We love new builds for rental properties, as do our tenants, so we just wanted to share a few of our learnings from the last 12 months since new builds have become more popular.
Feel free to take advantage of our free appraisal service so you know what your new build can expect to achieve in market rent.