Whether you're looking at your first property or your tenth in a portfolio of property assets, these three things can make a huge difference in your ROI.
1. The "Anchor" Test
Is the property that you're considering within 15 minutes of some sort of "Permanent Demand Driver"? Think major hospitals, large construction activities, large corporations or large education hubs like colleges and universities. Focusing on a venture situated within a "general tourism," area may require a more thoughtful plan that accounts for seasonal downtimes.
2. The "Value-Add" Renovation
Is the property able to accommodate MTR-specific upgrades? MTR renters are often searching for home offices, high-speed infrastructure and most importantly in-home laundry. A $5k investment in a dedicated workspace can have a large impact when it comes to higher ROI yields in the right area. Sometimes, even more than a $20k kitchen update.
3. The "Stress-Test"
What happens if your occupancy drops by 20%? What if interest rates shift? In my opinion, an asset is never bulletproof but running it through a worst-case scenario audit is always a great way to improve the chance for success. Being flexible to move between long-term rental and mid-term rental can open up a whole world of income potential.
If you're currently looking at new rental properties, consider looking for "engineered assets" rather than just nice houses.