Don't underestimate the power of a good floor plan when you're trying to rent out your investment property.
With lots of new build townhouses coming to market, it's easy to get swamped into the deal and forget about small factors that are still important... such as the floor plan.
Tenanting a property that has a less-than-desirable floor plan is going to prove much harder than tenanting a property with a good layout - so, how do you distinguish between the two?
Let's focus solely on off-the-plan townhouses because that is perhaps the most competitive rental market right now.
A lot of off-the-plan townhouses share a very similar layout with a kitchen, living, dining, & a toilet on the ground floor, and two bedrooms upstairs with a shared bathroom. But, there are a couple of distinguishing factors that can make all the difference.
Some of the key things to look out for include:
Whether the kitchen is 'L-Shaped' or has an island benchtop
Whether there is a guest toilet downstairs or a full bathroom somewhere else
If there is a dedicated laundry space or if this is added to the kitchen/storage area
The ensuite or lack thereof
And more
Let's consider two different floor plans:
Townhouse 1
This is a 2 Bed, 1.5 Bath townhouse and it has a very typical layout.
Some of the distinctive features of this layout include a kitchen, living and dining on the ground floor with an L-shaped kitchen and a toilet underneath the stairs
Upstairs you will see two full-size bedrooms with a shared bathroom in the middle. You'll see this layout (or similar versions) in the majority of new townhouses coming to market because it is simple and cost-effective. They are also very liveable and low maintenance for the tenants.
However, there are also some distinctive features that make this floor plan less desirable.
First off, the toilet under the stairs is not desired by many tenants and especially with the door opening next to the kitchen... not very practical. The kitchen is easy to use but island benchtops are more attractive for prospective tenants and can be the difference between renting out your unit and not.
Townhouse 2
This is a 2 Bed, 2 Bath townhouse and it has a more unique layout.
Downstairs follows a similar pattern to the first layout, with the kitchen, living, and dining all downstairs. However, in this layout, there is an island benchtop in the kitchen and a hot water cupboard under the stairs. Having the hot water cupboard under the stairs utilises the space better and makes for a more practical application for this space.
Upstairs you will see two full-size bedrooms but the master comes with its own ensuite and there is a full guest bathroom in the middle. Even though there is no guest bathroom downstairs, this layout is much more desirable and will likely rent out faster than the other unit (all else being equal).
What layout do you prefer?
Townhouse 1
Townhouse 2
What does this mean for investors?
Investors need to consider how the floor plan will impact the rentability of their new investment property. In most cases, floor plans won't have a material impact on investment performance over a long period of time, but if short-term cashflow is an issue, it is good to know which units are likely to be rented the fastest - especially in a time when lots of new townhouses are coming to market.
Remember, townhouses are designed for low-maintenance living so even if the floor plan doesn't match the home you live in now, that's not to say it is inferior. There is a strong demand for townhouse rentals so it always pays to speak with an expert property manager and get intel from the experts on how they think a unit will rent.
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