If the pandemic has taught us anything, it’s that life can be short so we should wring all the sweetness out of it we can.
For residential property investors, that’s rewritten buying checklists forever.
“We’ve seen a massive shift over the past year,” says mortgage broker Justin Doobov of Intelligent Finance.
“People are now looking for a lot more from their homes, for lifestyle and outdoor space and, with working from home part of the time now a permanent state, desirable locations have changed too.”
Once, he says, “little dogboxes in the city” would have commanded premium rents and high rates of price growth because people wanted to be close to the city and cut travel times to work.
Renters are increasingly looking for homes away from the CBD as working from home becomes more permanent. Photo: Vaida Savickaite
“But, while tiny city apartments will still always rent, they’re no longer the ideal things to buy.”
Now investors should be looking instead at homes that offer tenants a desirable lifestyle, with a backyard for a house and a balcony for an apartment, and in a location accessible to the coast, waterways, national parks or parklands.
“Proximity to the CBD used to be very important,” says property valuer and investment advisor Anna Porter of Suburbanite.
“But priorities have now changed with so many people only going to work two or three days a week.
“Investors should be looking for properties with not necessarily one small study or space to work, but his and her studies, or flexible floor spaces that can be adapted, or space in a backyard to put in an office pod, like a small shipping container that can be fully fitted out as an office. That could add an extra $50 to $100 a week to the rent.”
Apartments with facilities are now also better prospects than before.
Buildings that have barbecue spaces, pools and gyms are much more popular with tenants who are choosing to use amenities onsite rather than having to go outside for public services.
It’s critically important for investors to set budgets realistically, however.
Many people are now swimming in cash, having spent little on travel or dining out in the last two years.
“But investors should do a non-COVID budget because, once travel and restaurants are back, they’ll have less money to spend,” Porter says.
“And they should always consider the fundamentals of good investment and not get too caught up by regional markets and holiday markets and Airbnb.”
In Sydney, locations like the northern beaches, near beaches in the east, and the well-to-do areas of the central coast are now extremely desirable, according to national buyer’s agent Ben Plohl of BFP Property Buyers.
In Melbourne, it’s the Mornington Peninsula and inner suburbs with lots of cafes and shops, such as Fitzroy and Collingwood.
In Brisbane, investors should choose bayside suburbs or the inner suburbs on the north side.
“Tenants are now looking for places that are close to lifestyle amenities but also accessible to the coast,” Plohl says.
“They want somewhere that offers them cafes and things to do, but still with fresh air and the outdoors.”
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