A Must Read For All Potential Investors

Investing in property can be one of the greatest and most secure means to help strengthen your financial position. You choice of property, its location and circumstances in which you buy can have a dramatic bearing on the growth and returns your investment will deliver so it’s important to do your research and make an informed and educated decision.

1. Growth & Yields

Demand for housing is the dominant factor in driving capital growth and rental yields and location is the key contributing factor to increasing demand.

More and more people prefer to live in the capital cities, furthermore, within close proximity to local shops, cafes and restaurants. Australian culture has been trending towards social interaction at key places of interest with a good variety of places to catch up for coffee, evening drinks or a nice meal. Take note as to where the social hot spots are within the areas you’re looking to invest and target those which offer the best value for money.

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2. Location; Getting From A to B

Walking distance to public transport also plays a key factor in driving demand, when doing your research, be prudent when it comes to public transport and ease of mobility.

When investing in a location which is either close to the CBD or in a regional area, public transport will play a major role in securing and retaining quality tenants. This factor is also likely to influence the capital growth a property will receive as the daily commute has become a ritual that is heavily entrenched in everyday life and for this reason a tenant is more likely to pay a premium price if it will assist in making their lives easier in the slightest way.

3. What’s The Market Saying?

Rely on advice from local estate agents, community members and business owners as to what they are saying about a particular area. Identify the streets within your desired suburbs that may be considered better than others and focus your energy there.

My experience shows that established communities and suburbs outperform new suburbs. The reason for this becomes subjective, the longer a suburb has been populated producing generations of families and culture this can be developed into a sense of exclusivity which is another factor driving demand and growth.

4. House or Apartment

Put simply, my recommendation would be be to buy a house if you can. Historically houses have achieved higher growth rates than houses, however demand for apartments are on the rise with the nation recording a stratified median unit price just above $427,000 a year on year growth of 3.2% (Source APM House Price Report, June Quarter 2013).

Particularly in major cities it is common for the rental demand for apartments to outweigh the rental demand for houses, making it easier to secure a tenant resulting in less time your property remains vacant.

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5. Facts, Figures & Emotion

I would always recommend combining a mix of emotional connection and factual market analysis when making a decision on your investment, you shouldn’t let your emotions get in the way of making a purchase, however if the property does not feel right, listen to your instincts, there will always be another property.

Conclusion

Remember your goals when making the decision to purchase an investment property. Develop a strategy and stick to your plan. Be diligent in doing your research and seek advice from a multitude of credible sources and ultimately make your own informed decision based on your goals and aspirations.

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