Building Lifestyle Through Investments

How To Choose The Right Investment Property Builder?

by Mar 4, 2022

Congratulations! You’ve decided to step into property investment. You will soon join the millions of others across the world enjoying an additional income from their investment property.

Where do you begin?

This article will ask, and answer, the questions you have and some you haven’t asked yet!

We will look into different types of property investment and different types of property to invest in.

We’ll advise on a great location to get the optimum return on your investment.

We’ll list the attributes of the best house builder for you
Finally, we’ll share some tips to help you become successful straight away.

What is property investment?

A property investor has spent money on a building or land. This is “the investment”. They intend to generate an income from their investment.

Property investment in three sentences!

Of course, to be successful the funds received (the “return on investment”) should exceed the ongoing costs of the investment, ensuring the property owner is making a profit. Let’s look at how to make sure of a profit.

Commercial or Residential?

Commercial property is, generally, more expensive than residential property. There are legal considerations around owning a building with offices and shops or a car park, for instance.

The first property investment will, most likely, be a residential property. You will own a block of land with one, or more homes.

Cheap or Quality

Your first question, then. Do you want to purchase a run-down property or go for quality?

The advantage of buying a home requiring renovation is it will probably be cheaper. The disadvantages of such a home are

  1. You will need to spend time and more money on doing building work, repairs, renovations. This means a delay in earning any income from the property.
  2. You will probably have to charge less rent on a cheaper property. The return on your investment will be lower than it could be.
  3. You will attract less desirable tenants to a shabbier home. Your tenants may not take good care of an obviously older property. The property value will decrease.

The best quality will be from a new home. You will be working with a home-builder to construct a top-quality property on land you own. The initial cash outlay on your investment will be higher but the advantages of investing in a new home are:

  1. You will attract premium tenants, paying top of the market-rate rent. Living in an obviously pristine home, the tenants will take care of your investment.
  2. With no remedial work needed, you will be able to earn a rental income as soon as you are handed the keys to the home.
  3. A new home almost always increases in value over time. You will eventually be able to sell your investment for a profit.

Types of investment properties

The type of property you build will affect your income and even where you live yourself!

The three best options for investment property are:

Houses

  • Build a new home on your land
  • Rent it out
  • Likely to appeal to families
  • This will give the best rent from a single property

Duplexes/Dual Occupancies

  • Build two new homes on your land, either separate or sharing a roof
  • Rent out one and live in the other
  • Rent out both
  • Likely to appeal to smaller families or young couples
  • This option provides the opportunity for two rental incomes
  • Your land resale value is boosted
  • You could subdivide the land and sell two individual homes

Granny flats

  • You already have a house. You could build a granny flat on the same plot of land
  • Rent out the granny flat
  • The granny flat build process is shorter than the other options. your additional income stream will begin sooner!

Where to build for the best returns?

Location is important for any housebuilding project. When you are building a property for the rental market, the location can be critical to tempt those prized premium tenants.

Water

The Australian dream is to live in a home next to the water, with great views and cool evening breezes. Most of us are unlikely to ever afford a multi-million dollar property with a mooring, within Sydney harbour.

Australians are happy to live near water, with a sandy beach or a beautiful lake a short trip away from home.

Transport links

We need to go to places. We may commute to work or travel for fun at the weekends. Transport is important. A location with a railway or a major link road will be more desirable.

Local Community

Most people like to live in a community. For some, the community may mean friendly chatty neighbours. For others, it may be a vibrant cafe scene where we see familiar faces. It could be safe, clean streets and a local shopping mall with the usual chain stores and supermarkets.

Schools

One for the families. An area with good schools is a must for parents.

A great location for growing families will have primary schools/kindergartens through to secondary and senior secondary all within travelling distance. The family will grow up and the children will make friends in a single area.

Further considerations for families include recreational and sports facilities. For the weekends and those balmy evenings, beaches or parks with playgrounds are also essentials.

Other considerations

Property Management – Hire or DIY?

Another question for the first-time property investor is whether to work with a property manager or do it yourself. Before you decide, here are some of the essential duties carried out by a property manager:

Advertising – Advertising your rental property (online/print media)
Viewings – arranging viewings of the property with potential tenants
Screening – conducting background and credit checks on potential tenants
Lease – preparing and signing a lease agreement with the tenant
Finance management – collecting rent from the tenant. Making regular payments to the landlord. A statement should detail income (rent) and expenses
Maintenance – handling any maintenance or repairs needed on the property

Before you dismiss this as an unnecessary expense, bear in mind a professional property manager may help you to get the best return on your investment by getting better tenants and suggesting a higher rent. They also conduct regular property inspections to ensure your valuable investment is well maintained.

On the other hand, if your investment property is on the same land as your home, you may be able to keep an eye on your property and the tenant and collect your own rent.

What to look out for in a great house builder

Your biggest decision will be which builder to build your investment property. Here are some of the things to help you find the best builder for you?

Reputation – Check out reviews – see what past clients have to say about the builder’s work. Are the buildings high-quality? Did previous customers enjoy their experience with the builder? Would they recommend them?

Set up a meeting with the builder to discuss your specific needs and wants. Are they able to accept your ideas? Do you think they will keep you informed?

Compare prices and services – Turnkey Construction
This type of construction project normally means the builder will handle the entire project, from design to construction, including the supply of materials.

You wait for the build to finish then you are able to ‘turn the key’ and move in straight away.

Pricing – fixed or hidden extras
Make sure the price you agree on is the fixed price for the entire job. There is nothing worse than having a budget and arranging finance to then discover some ‘hidden extras’ you weren’t aware of!

Quality inclusions attract premium tenants
Perhaps an obvious consideration, this. Make sure any inclusions are of the best quality. This will attract better tenants paying higher rent. Better quality fittings will age better, too, retaining their value.

A tip for first-timers: Interest-only loans for instant returns

Reducing your monthly outgoings will help to boost your profits. Regard property as a long-term investment. The longer you keep it the better resale value for you. It may be beneficial to not pay off a property loan.

An interest-only mortgage will have lower outgoings than a mortgage-paying off capital and interest. If your investment is a granny flat, for example, you may be in profit from the start since the rent you will receive is likely going to be higher than the value of your repayments.

Acrow Investments – master builders with a great reputation

acrowinvestments - family

Having raised, and answered your investment property questions we are bound to advise Acrow Investments should be your first choice for home builders.

Acrow tick all the boxes:

  • we have years of experience building houses, duplexes and granny flats
  • We are based along the Central Coast region, which is a fantastic location for investment. There are beaches and lakes and transport links to Sydney and Newcastle. The Central Coast has a great community vibe and is popular with families as well as city workers seeking the waterside vibe after work.
  • Acrow has a great reputation with hundreds of delighted customers.
  • We offer turnkey construction with a fixed price quote.
  • We only use the best quality inclusions from big-name Australian suppliers.

Contact Acrow investments and discuss your investment property dream today. Join the hundreds of happy investors and begin your additional income stream.

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