Posted December 20, 2017
Investing in the right location: How to profile a suburb
Whether you’re buying a property for investment or to live in, the location you choose will significantly impact the value of your purchase and the quality of the life you’re creating.
Short of having a magic ball, how can you tell if the location that has captured your heart will be an investment that will capture the heart of your bank manager?
It’s called suburb profiling, and it’s easier than you think.
You can tell a lot about the investment potential of any suburb by following these steps:
Calculate the investment potential
You don’t need to be a financial whizz to work out the investment potential of a property.
With a quick internet search, you can easily assess an area’s past capital growth by comparing price or rent increases over a period of years.
Of course, that only tells you what has happened in the past. To see into the future, you need to find out if the population of the area is increasing or decreasing.
Check out rental vacancy rates. High vacancy rates could indicate that there is an oversupply of properties in an area, a symptom of stagnate growth.
There are also many online tools and sources from which you can collect sales data, including the Australian Bureau of Statistics, which provides a wealth of information on every suburb and lets you compare it with state and national data.
Examine the local amenities
Properties located near train stations, schools, shopping centres and other amenities are indicators of potential property price growth because of their lifestyle appeal for both renters and buyers.
Proximity to childcare facilities is currently proving to be a big drawcard, also.
Here’s a tip: Don’t just check out what’s already there – look for any planned infrastructure, which may positively impact the future price of properties in the suburb.
Learn about the demographic
For most people, finding a demographic that fits means assessing the ‘village’ aspect of a suburb.
If you have a young family, you might want to choose a suburb popular with other families.
For some people, religious or ethnic considerations might also be of significant importance.
For investors, demographics can help you identify the sort of tenant you would like to see in your property. For example, would you prefer families or young professionals?
Other financial considerations attached to demographics include crime and levels of unemployment, which could affect rentability, as well as insurance costs.
Consider lifestyle factors
Of course, life isn’t lived just in your house, and more and more, ‘lifestyle’ is topping the list of attributes of desirable suburbs.
Newer developments are increasingly cornering the market on lifestyle factors, being specifically designed to get residents out of the house and enjoying life.
Look for homes that offer easy access to parklands and open spaces, as well as community hubs with cafes and meeting places designed to foster a sense of community.
Finding the right property
If you’d like to find out more about these suburbs, including median house prices, rental yields and predicted growth, call (03) 9988 2900 to speak to one of our experienced consultants. Alternatively, drop us a line via our contact form and we’ll get back to you.