The type of investment property you should never buy
Investment properties are such a personal choice and the most common question from soon to be landlords is, “What type of property should I buy.”
Today we’ll start with what you shouldn’t buy. This differs for everybody but if you are strapped for cash and rely on a regular income from your property you should steer clear of:
- Timber homes. Although quaint and very popular with tenants, timber homes undoubtedly require more maintenance. Painting will need to be carried out every 10 to 20 years, verandah boards with continually require replacement and/or oiling and there’s a higher risk of termite infestation.
- High turnover properties. Units and duplexes can offer a higher return on investment than a house BUT they also have a much higher turnover of tenants. Depending on the vacancy rates, you might find that you are much better off to buy something that attracts long term occupancy.
- Acreage properties. The more rural the property, the more that can go wrong. Pumps burn out, water tanks leak, gutters get clogged, fences deteriorate… and the further out of town the property is, the more you’ll be paying for tradespeople to attend when something goes wrong.
- Yes they are cheap but they are harder to get finance for, sometimes impossible to get insurance for and are NOT attractive to tenants. Stay high and dry.
- Steep driveways. We all know that above the road is better than below the road but steep driveways should always be avoided. Tenants with low cars or high 4WDs will automatically dismiss the property after a drive by. And these homes often have drainage issues.