What makes an A-grade Sydney investment property?
Buying an investment property is a whole different story to buying a home for yourself to live in.
If you are interested in investing in Sydney real estate in the Neutral Bay area, then there are things you need to think about in different ways than if you were buying your own home.
What are grade A properties?
An A-grade investment property is a property that will be tenanted the most easily and make you the most money. According to brokernews.com.au, an A-grade investment property should double in value every seven to twelve years.
Finding your A-grade property
The decision to buy in an evergreen postcode like Neutral Bay is an excellent start if you want your investment to have A-grade status. Evergreen suburbs are always desirable, and your investment property is more likely to hit that doubling every seven to twelve years mark if it is in a tightly held area where new developments are limited.
So what else do you need to consider when choosing an investment grade property?
First of all, remember this property is to be tenanted. You won’t be living in it yourself.
This means that you must think with your head and not your heart. Going in with the wrong mind frame is one of the major mistakes that investors make. It doesn’t matter if you fall in love with the property; if it doesn’t tick the boxes that will get it tenanted and make you money, it’s not the right choice.
The seven signs of an A-grade property
Other than doubling in price every seven to twelve years, there a seven signs of an A-grade property:
1. Quality
Quality is probably the most obvious. The home needs to be structurally sound and in good condition. If it is a strata property, you want to avoid having to pay out a lot of money for repairs. For a home, while small renovation projects are OK, check before you buy for problems with structure, plumbing or electricity.
2. Scarcity
Whenever demand outstrips supply, you have scarcity. And when you have scarcity, you have a highly desired product. This rule applies to real estate just as much as to all other forms of commerce. Neutral Bay ticks this box because homes tend to be tightly held and stock is always limited, even in a downturn.
3. Natural light
No one likes a dark and dingy home. A northern-facing home gives the best light in Australia, with western-facing windows coming in second.
4. Good floor plan
An A-grade property will have a well-thought-out floor plan with a comfortable flow. Dining areas that lead to alfresco areas and bathrooms near bedrooms rather than a rabbit warren of corridors and jumbled rooms. These days, buyers and renters tend to prefer an open plan living/dining area and good separation between bedrooms.
5. Privacy
People love their privacy. The best investment properties will provide a significant sense of privacy. If there is a garden or a lower level balcony, it’s possible to improve privacy with the help of screens or plants.
6. Land/space
An A-grade property will have a decent land-to-building ratio, meaning no giant houses on small blocks or tiny houses on huge blocks. With an investment apartment, every square metre counts. Extra courtyard or balcony space is a bonus, and look for properties with their own internal laundry and parking space.
7. Location
A-grade properties are in desirable locations with easy access to shops, schools, and urban centres. This is why Neutral Bay is an excellent place to hunt for A-grade investment properties; the suburb has easy access to the city and an appealing urban village with shops, cafes and restaurants.
Get hunting
You may not be able to tick off each of the boxes above, but they provide a guide around what to look for.
The final factor is budget; ensure you can afford to cover the repayments should you find yourself between tenants or affected by a jump in interest rates. Even A-grade properties require time to deliver returns so you need to buy with the confidence that you can afford repayments for the long term.
Hunting for that A-grade property?
Let us help you find it. Call Home Property Agents today.
