What Makes a Good Income-Producing Residential Property

Demand is the only thing that fills the unit. Look for proximity to employment nodes, transport routes, schools, hospitals and universities, and check how long comparable units sit on the market before letting. A property with shallow demand will be vacant at exactly the moment you need the rent.

• Time to let for comparable units in the same complex or street.
• Depth of the tenant pool, not just its size.
• Rental affordability relative to local incomes.
• Whether demand is driven by something durable, or by a single employer or development.

Two units at the same price and rent can perform very differently. Levies, municipal rates, insurance and the maintenance profile determine how much of the rent you keep. In sectional title, read the scheme financials and the maintenance plan before you rely on the current levy.

Every property carries an operating burden: tenant placement, rent collection, maintenance coordination, compliance and inspections. A property that returns slightly less but runs cleanly usually outperforms one that returns slightly more and consumes your attention, because neglected operations show up as arrears, damage and vacancy.

You will eventually sell. Standard, well-located units in ordinary price bands sell faster than unusual configurations. Ask who the next buyer is likely to be, and whether they will be able to finance the purchase.