Australia’s top property investors always seem to have a knack for picking the best areas in which to place their cash. However, when you look at it in detail, there’s no luck involved.
All great investors have clear, defined strategies and methodologies which help them identify areas they should be targeting. By taking a look at the market, reviewing an area and consulting with experts, they bolster their abilities to make educated decisions.
In fact, there are a couple of clear signs that an area is about to see an explosion in property value. Read on to find out more.
Read the Signs and Analyse the Market
The best insight into the property market you’re going to get will be from real estate professionals. They eat, sleep and breathe their chosen markets and will be able to help you make educated decisions when buying a property.
When looking for an area to target, they will usually recommend checking out the following points:
The median price
You shouldn’t just consider the current property prices – how have they changed over the past 12 months? Additionally, how do these prices stand up against those in neighbouring suburbs? If one area is significantly cheaper than other areas, it could be an indication of imminent growth.
Take a look at the most recent property sales in the area, as well as the prices the properties went for.
If you’re looking to rent your property, an area with high vacancy rates should be avoided, as there will be more competition from other investors.
Changes to the area
If there are any dramatic changes to the area, you need to know about them. These could include school construction, additional amenities or infrastructure developments.
Visit the Area Yourself
The best way to find out if an area will appeal to your target market? Visit it yourself. It’s not recommended to invest in an area you don’t know yourself, so head down there, walk around and get a feel for it.
By checking out the local amenities and attending open homes, you’ll be able to get a feel for the local community and current competition. If you’re strongly considering buying a house, stop and ask locals how long they’ve lived in the area, as well as what their opinions of it are.
Huge planned developments within an area aren’t always a good thing. You need to work out whether they’ve taken place as a result of anticipated area growth, or whether they’re in response to growth that’s already taken place.
The local council will be responsible for area zoning and re-zoning, so visit their offices whilst you’re local and ask them yourselves.
Success Factors for Property Investments
There are several time-tested factors that indicate whether an investment will be successful or not. If your target area has one or more of the following, it could suggest that it’s worth investing in:
- Close to city or beaches
- Bustling inner areas with restaurants, shopping and cafes
- Local schools, parks and hospitals
- Recent large growth in surrounding suburbs
- Strong public transport links
Bear these factors in mind and you’ll be in a position to make an educated property investment decision.