7 Design Tips For A Money-Making Apartment
As property investors we are all in the business of building wealth, and that means building a well-balanced real estate portfolio of houses and apartments.
Now apartment purchasing is a bit of an art form – but if you get it right you can expect to receive high rental returns of five to six per cent. However, this will only be achieved if you buy a property that is better than the market average.
Of course, there’s a whole other conversation around researching strata reports and choosing a scheme to invest in – or selecting the right off-the-plan property. What I want to talk about though is some of the most important layout and design features that will help you secure money-making real estate.
I’m calling them my ‘back-of-the-beer’ coaster tips to choosing a great apartment. Let’s get started:
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Do a deep dive into the development
Whether it’s a current property, off-the-plan, or was built 25 years ago, it’s important to know the calibre of the design team behind the product.
If it’s a well-established and recognised group, it’s usually a sure thing that the overall complex is architecturally beautiful and functional. Do your research and find out if they’ve had positive or negative feedback in the past.
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Measure the space and volume
It’s essential to analyse space in an apartment – both in volume and floor span.
Start by looking at the square metres. Typically, a town plan will outline a minimum apartment size for construction. Let’s say 65 square metres is the minimum and it’s also the norm in an area for a two bedroom.
I would be purposely looking for a property that is larger than this because it’s clearly undersupplied in the market.
Next you want to look at things like ceiling heights. For example, if you’ve got a 2.4 metre ceiling, the volume of that apartment is going to feel quite claustrophobic. However, find somewhere with a 2.7 to 3 metre ceiling and all of a sudden, it’s going to feel so much more spacious.
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Determine if it has circulation space
In real estate, we call the space in between elements the ‘circulation space’. Put simply, it means the ability to walk around things and circulate.
A lot of apartments have too much wasted space with floor plans that just don’t make sense. Good internal flow is a lot harder to find than you think – being able to walk in and use something instantly means you have a functional, well-designed property.
If your real estate is dysfunctional, especially when it comes to having circulation space, then you need to manage your expectations of what tenants will want to pay.
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Take note of the fixtures and fittings
Fixtures and fittings are more important than you think. Not only do they link directly to reflective design and make a great value add, but the quality of them can be a big indicator as to how much maintenance will be required.
You should be able to get a solid 15 to 20 years out of a property without having to spend money on repairs. Good fixtures and fittings allow you to do that.
Ask yourself; are you going to have to replace the tapware? Redo the shower? Update handles and hinges? If so, all of this adds up to money coming out of your pockets.
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Inspect the frontage and the view
One of the best advantages to owning an apartment is buying a view, and in behavioural economics a view is worth a lot of money.
Now on top of that, look at the frontage or outside facing of the property. Believe it or not frontages add a lot of value to real estate, and the wider yours is the more it will be worth.
Considering that the average house has a facing around 10 metres wide, if an apartment can get close to that AND be functional, it’s going to make for a great investment.
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Seek out the second and third place
Outdoor space is especially important when it comes to apartment living. I’ve spoken about the first, second and third places before here.
When it comes to an apartment, the second place is going to primarily be your balcony. Again, knowing the minimum size requirements for a balcony is going to help you find a more sought-after property.
For example, in Melbourne the average balcony is eight square metres. Find anything above that and you’ll have real estate that is better than the market average.
Even better, some complexes have community garden spaces, pools and rooftops – these are fantastic second places and bring so much value to apartment living.
The third place is amenities and lifestyle precincts that are walkable from your property. Think parks, coffee shops and the beach. To be really successful as a property investor, you ALWAYS need a third place.
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Look for storage space
Generally, the minimum amount of storage space is nine cubic meters in an apartment. In most cases that would be inclusive of the kitchen and laundry shelves and built-in wardrobes in the bedroom. If you find an apartment that can beat nine cubic meters, you’re onto something special.
The beauty of a lot of newer apartments is that they also come with a secure car park – and parking also provides storage. You can put cages in or above your car space. Even if the property doesn’t come with enough storage, there are usually clever ways to add it in.
This is especially important, as it will create extra value in the overall rental return.
APARTMENTS WILL HELP YOU TO BUILD YOUR WEALTH
The right apartment in a fantastic location could genuinely see you earning up to $50,000 a year in rental returns, however you have to have a clear understanding of what to look out for.
All of my beer coaster tips above are going to help you find some worthwhile real estate, but there is still so much to consider – things like green buildings and energy ratings, orientation, and access to cool breezes and natural light.
The best way to develop a kickass apartment strategy is by hearing from property coaches who have done it all before. Our team runs free real estate workshops to help investors build a well-rounded portfolio. Learn the secret language behind buying apartments that will generate passive income for years to come.
By Sam Saggers
