Investment criteria - city location
If you're set to buy a property in the big smoke, make sure your potential property investment the following criteria:
• Inner city properties within 10km of the CBD - the closer the better
• Quality transport infrastructure (mainly train stations and arterial road networks, but may also include ferries and/or buses)
• Properties with features that are not easily replicated, such as waterfront homes, properties adjacent to national parks, properties on larger blocks of land than surrounding properties
• Demolition control areas - these areas are typified by character housing that can't be knocked down, which means the potential for new development in the suburb is extremely limited
• Urban renewal areas - urban renewal has a demonstrated stimulatory effect on property prices, and the earlier you invest in these areas, the greater the growth potential in both rents and values
• Inner city areas with a large employment base within the suburb, or in adjacent suburbs - such as properties located in close proximity to large hospitals
• Properties located near colleges or universities, as these institutions provide a large, captured rental market
• Opportunities where prices appear to be undervalued, particularly when compared to surrounding suburbs
• Properties located near entertainment, dining and recreational precincts
Investment criteria - regional location
Considering a property in a regional location? Check your investment against these criteria to ensure your slice of region real estate stacks up:
• Look for areas that are undersupplied, with few properties and strong demand
• Be aware that the best strategy may be a short-term hold strategy of one to two years, or even shorter in resource driven 'boom towns'
• Investigate areas with strong growth potential - whilst they may not get the highest rental return, capital appreciation might more than make up for this.
• Look for the next sea change or tree change hotspot
• If purchasing a coastal short-term accommodation property, look at ABS tourism numbers to see what the vacancy rate is, and what the overnight rates are
Source: Cameron Kusher, RP Data
