It’s often said that location is the most important part of successful property investment. Purchasing in growth suburbs, or high demand areas is undoubtedly the pathway to property investment success.
But how do you know? How can you predict where people will buy, if you can’t afford to purchase in the best 1% of areas? Here are our top tips for choosing a location that will yield the best results:
1. Spend Time With the Locals
So you’ve done some research online, chatted to a few experts and are confident you found a suburb that everyone will want to be living in. Now it’s time to dig a little deeper.
Spending time with the locals enables you to get a realistic take on what’s good, and bad about the area. Perhaps you’ve read that there is going to be some new infrastructure, such as a park or shopping centre, built soon. What are the locals think of that? Is it a good thing, or is the local council just telling people that because they have already spent the money? Go to a local coffee shop, and strike up a conversation with a few normal people. You’ll be amazed at what you’ll learn.
2. Transport
If location is the most important part of property investment, it can be argued that transport is the most important part of location. Amazing areas with loads of infrastructure have been overlooked by the general public because they don’t have easy access to motorways or public transport. Wherever we live, we need a simple way to travel, and without a direct, logical link to major roads or public transport, it’s unlikely an area will become the next big thing.
3. Infrastructure
Following on from transport is infrastructure. Importantly, don’t look at new roads, shopping centres, schools and amenities at face value, instead consider their implication on the local area. A new road that gives direct access to the motorway could solve the transport problem we just discussed. As a result, the area could increase in value in a very short period of time. A new school could attract an entirely new demographic of people, and the impact of this could be a revitalised shopping district. Consider what is likely to happen as a result of improvements, rather than just looking at the infrastructure itself.
4. Look at a map
It seems obvious, but many people find an area they like and stick with it. Look at a map and write down average prices in surrounding suburbs. Why does this matter? Because if a neighbouring suburb is closer to the city or has easier access to a secondary school, then it may be more popular than your suburb. If prices are comparable, then you may end up buying in a good area, that’s not quite as good as the one next door. If prices are not comparable then you may end up purchasing in a more expensive suburb than a slightly more affordable suburb next door.
5. The Right Tool for the Job
Even when you are 100% certain that the area you’re looking at is perfect, make sure you keep the locals in mind when purchasing a property. It is possible to buy the wrong house in the right location, thereby turning it into the wrong location for you. If the area is populated with families, is a young professional couple likely to move in? If not, will a family move into a one-bedroom apartment like the one you’re considering?
6. Consider Your Budget
Don’t waste your time wandering around an area that will require you to purchase a beaten up old cottage, pull it down and build a small mansion for the investment to be profitable. The budgetary decision comes first and should dictate the location – not the other way around.
7. Ignore Clichéd Advice
Your area will inevitably break one of the classic investment property “rules.” Examples of these include only buying in areas you know, never purchasing an apartment because they don’t have land, avoiding homes near motorways…Speak to experts, and back quality knowledge over outdated, well-intentioned advice.
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DDP Property (DDP) is a unique wealth creation mentoring program that is designed to help Australians gain financial freedom, offering each client an ongoing personalised service catering to their changing circumstances and needs. DDP has helped purchase over 1,000 properties for its clients.
For more information please visit //www.ddpproperty.com.au/contact.html
Zaki Ameer | Founder | DDP Property