Lauren and I have been househunting. This is our first foray into investment buying together and it's fun. We spent all day Wednesday in a nearby city looking at houses and thinking about things like renovations required prior to rental, maintenance required in the near future, potential resale value.
We looked at eight houses and discounted five of them almost immediately. One was already rented which was appealing. The house itself looked great but it was too expensive, considering its nearest neighbour was the local cemetary. One was across the road from a joinery - poor resale value and only two bedrooms. One looked like good value until you noticed the kitchen benches had been painted and were now peeling and the kitchen had those awful foam tiles glued to the ceiling - too much work for the price.
The three we really like are in three different areas. One is perfect, excellent condition, good yard, reasonable area - just right at the top of our budget. One is tiny, in a great position, with loads of character and potential to add a third bedroom - but already right at the top of our budget. The third one is in a reasonable area with a good kitchen, just a horrid pink bath and tacky floor coverings. The benefit of this one is that it's cheap enough that we could change the bathroom and floor coverings and still spend less than either of the other two. Even though the first two houses appeal to us more, this one makes more sense for an investment.
It's amazing how I've had to change the way I look at houses and think about them when I'm buying purely for investment purposes. I've never done that before. Every house I've bought previously has been with a view to live in it, renovate and then, if I can afford it, rent it out when I move on to the next house. I've bought houses based on what I like and want in a house, not what would be the best financial decision.
And that's the really fun part over with. Now I have to check insurance companies to find out how safe each of the areas are, the city council to find out yearly rates charges, and spend some time with a spreadsheet calculating potential % return for each house. Then comes arranging for a building and pest inspection, sourcing the funds and engaging a solicitor to do the conveyancing. It's going to be a very expensive couple of months before the house is settled and rented and we start seeing any sort of income from it. Providing we get the house we want at the price we want in the first place.