I have written this article to share my experience with other investors and hopefully get new ideas and learn more about property investment.

Through the course of my property investment experience, I believe your decision will be generally sound if these 5 important principles are covered:

1. Location

Property investors have always advocated that location is the most important criteria in the property investment decision. However, location means different things to different people and it depends on whether someone is buying the property as an investment or as an owner-occupier.

There are people who prefer the hustle-bustle of city living and can put up with increased human traffic and noise, yet others may prefer a suburb which is more family-friendly with leafy surroundings. In general terms, for a location to be strategic for all intents and purposes, it should cover the following aspects as far as possible:

a) Close proximity to public transport and CBD ~ public transport adds appeal as it gives the owner or tenant an alternative to private transport. Investors generally prefer a suburb which have good public amenities as they are more transient than owner-occupiers.

b) Close proximity to good schools / learning institutions. For many families, this is the sole purpose of moving to a particular location. Being able to ferry children to and from school with minimal fuss is a great time-saver since parents have to do this at least 5 times a week. To others, living close to a good school or university adds perceived prestige.

c) Local attractions such as shopping malls, parks, cafes & restaurants, beaches and other significant local amenities add to the lifestyle and allure of the location.

d) Minimal traffic noise ~ it is generally better to avoid being located on major streets and highways, toll-roads, train lines and flight paths to minimise traffic noise but close enough for easy access by car and public transport. Remember, real estate agents like to use words like “whisper quiet street”, “cul-de-sac” to promote a location which is peaceful and quiet and this is a legitimate appeal to most buyers.

e) General surrounds ~ in general, a pleasant surrounding such as a leafy, tree-lined street and lower population density location is better than one which is over-crowded with apartment blocks, commercial and industrial facilities although in some cases, the latter may also have good investment outcomes in the long term.

Obviously the above may be less applicable for investments such as a holiday lodge by the ski fields, an ocean-front property or other higher end properties and apartments.

2. Floor plan

The most important aspects of floor plan should include the following:

a) Floor plan design should promote privacy for bedrooms, efficient use of floor space and modern open plan living for family living and entertaining.

b) Courtyards, patios and balconies should be of good size and configuration must be suitable for outdoor living and entertaining.

c) Good storage facilities such as wardrobe design and space, bathroom vanities, kitchen cabinets, laundry and utilities.

d) Aspect, views and outlook ~ In Australia and the southern hemisphere, one of the most favoured aspect of a property is the north and north-east aspect as it provides ample natural light. This is important as it gives the apartment its distinctive “feel”. Bright and sunny aspects, district, water and uninterrupted views are preferred. Be sure that existing views will not be built over and blocked by future development as this is a sure factor which will decrease the value of your investment.

e) One important factor which buyers often overlook is ceiling height. The minimum ceiling height required for apartments in New South Wales is 2.45m. An apartment with good ceiling height should be approximately 2.7m and above although ceiling heights may vary from different living areas such as balconies, kitchen and bathrooms. High ceiling and lofts give a sense of space and openness.

Note: In New South Wales, a bedroom must have at least a window to be deemed as such.

3. Finishes and inclusions

Finishes and inclusions refer to the general fittings such as kitchen appliances, gas cooking and heating facilities, quality shelving and cabinets, tapware and bathroom fittings, quality carpets, paintwork, door panels, handles and skirtings, glass doors, powder-coated panelling, switches, modern lighting, reverse-cycle air-conditioning, bathroom and kitchen wall and floor tiles, wall panelling.

These items are important because it sets the quality benchmark for a particular property. Terms such as "European appliances", "Italian marble", "ceasar stone" are among many selling points which indicate the quality of finishes and inclusions.

4. Body corporate / maintenance

The effectiveness of the Body corporate of an apartment development will determine the strata levies, both the sinking fund and the administration levy that you will be liable to pay. Personal preference will dictate whether you will be willing to pay for conveniences such as swimming pool, gymnasium, spa and sauna, concierge, on-site security guards and other facilities. Building with poor management and maintenance will deteriorate more rapidly, thus limiting your investment up-side.

It is also good to know the ratio of owner-occupiers and investors in a particular apartment block. Owners tend take better care of their properties and a high level of owner-occupiers is generally better than a building which is majority occupied by tenants.

The profile of occupants is also an important factor, ie whether they are professionals, retirees, students or migrants will have an impact on the marketability and appeal of your apartment.

5. Research

One of the most important aspects of property investment is good research. By this, I mean that your research needs to be detailed, relevant, accurate and up to date. Before you dive into the buying process, do look at as many properties in as many locations as possible. Be inquisitive by talking to friends, experts and people who live in the neighbourhood that you are considering and gather as much information as possible. This way, you are able to compare and contrast between the good, bad, acceptable, tolerable to the down-right unacceptable. A good comparative measure is price and price per square metre, which is obviously determined by location and quality.

Good luck and happy hunting!

More information at my property website.

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