We all want to be successful investors – here is what you should know before you begin searching for a profitable rental property in Wellington.
Consider the quality of the neighbourhood to help evaluate what types of tenants you will attract and how frequently vacancies may occur. Properties in areas near economic centres, popular local villages, parks, malls, schools and universities are likely to be in high demand by tenants. Notably, rental properties near universities often attract students; this can cause vacancies during the summer that can be hard to fill. Also deliberate whether the neighbourhood is likely to surge in value in the future.
Accessibility To The Local Transport System
Check out what local transport is close to your potential investment property. Proximity to local transport systems can significantly influence the property’s popularity and profitability, as many tenants rely on the system in day-to-day life and can be the deciding factor as to whether or not they want to tenant your rental property.
The Number of Rental Property Listings
The number of rental properties listed can help determine what areas are popular in Wellington. Areas with declining listings show low property vacancies, suggesting the area is popular amongst tenants who are tenanting properties and staying longer. However areas with increasing listings show high property vacancies, signifying the areas are not currently popular and in demand by tenants. Notably, areas with declining listings will usually have higher rents due to the high demand from tenants and limited availability of rental properties, which can make these areas more profitable for landlords. Take a look at our latest insights on the Wellington Rental Market for recent statistics.
The rental property market is competitive, and what rent you can charge is fundamental to what your rental income will be from this prospective Wellington investment property. Look at Trade Me to find the average rent on similar properties listed in your chosen Wellington area. If the rent can’t cover your mortgage payments, insurance and other expenses then it may be best to start looking for another property, or at how you can change the property to increase the rent. Can you add another bedroom? Could the kitchen or bathroom be redecorated or renovated? Are the paint colours on trend?
Are You Self-Managing or Hiring A Property Manager?
To help determine what location is best for your situation it’s best to decide early on whether you plan to actively manage your Wellington rental property or will hire a professional. If you plan to self-manage getting an investment property reasonably close to where you live can help create smoother and more efficient property management. However if you plan to hire property managers your proximity to the property is less of an issue. Remember that using a property manager frees your time for other commitments such as family and career, and allows time to focus on buying your next rental property. The gains from owning a larger portfolio will usually far outweigh the savings made through DIY property management.