Whilst some of Australiaâ€™s capital cities are experiencing some of the highest property prices in the world, getting into investment property doesnâ€™t have to be a struggle. There is in fact, another way of getting onto the investment ladder. Venturing out from the urban centres of a state, will enable you to view a wide range of properties at much more realistic prices.
Purchasing an investment property in a regional town is a great way to begin building an investment portfolio to your name. Before taking a dive into property investment however, there are specific things youâ€™ll want to look out for which can help when choosing the right investment for your specific needs.
1)Â Â Population Trends
Look at the current population in the town youâ€™re thinking of investing in. Donâ€™t forget to also look at potential long-term trends in the same town. Steady upward trends are ideal when investing in property, but a stable population is also an acceptable alternative.
Itâ€™s possible to tell quite a lot about a town and whether itâ€™s thriving, by walking down the main streets. When doing this, make note of occupied store fronts, newly opened businesses, public services and foot traffic. Youâ€™ll be able to find a vibrant area within the town by doing this.
If youâ€™re thinking of investing in a tourist town, you should visit in off season to get the bigger picture.
2)Â Â Vacancy And Property Sales
You should do some research into the demand for local rental properties in your chosen area. High rental yields coupled with low vacancy rates may indicate that a town is an excellent place to buy in â€“ assuming youâ€™ve ticked all the other boxes.
Donâ€™t forget to also look at sales data. Low seller discounts would suggest that properties in the area are in demand, as do high clearance rates when properties go to auction. See how long properties remain on the market as well, as this can be indicative of how the market is doing in terms of property supply.
3)Â Â Getting From A To B â€“ Infrastructure
Make sure you check out the infrastructure of a town before making an investment. Ask yourself if travel in and out of town is easy or not. Are there any commuter links to major cities? There has been a significant spike in prices around East Coast cities, as people are being priced out of the capital cities.
Perhaps consider looking into areas where high speed freeways and train services are readily available. The savvy investor will consider looking at local council information, in order to see if there are any major projects being planned. New hospitals, universities and airports are sure-fire signs of new freeway construction.
4)Â Â Industry Diversity
Regional areas that only rely on one type of industry, can often be high-risk investments â€“ especially if youâ€™re staring down the barrel of a long-term investment. Consider looking at an area where there are several different employment options.
Tourist towns will experience seasonal demand, making them responsive to larger economic changes. When the times are tight, people will forgo that annual holiday â€“ which will make the holiday town suffer. The flip-side of course, is that tourism can be an excellent industry where other revenue sources are abundant.
Diverse industry options are indicative of stable employment and a consistent population. This should be considered at the forefront of any investment purchase.
Whilst making an investment in regional and rural property requires different sets of calculations from those needed in urban areas, there are many fantastic opportunities to be had. Start scouring the countryside, where youâ€™ll find an abundance of affordable and accessible investment opportunities all over the place.