07/11/2020
Four matters to consider before buying an investment property
Finding the right investment property requires time and effort. Firstly, you need to understand what you want from your investment property? Capital growth or Positive cashflow?
When you determine the above. There are things to consider are;
• What to buy (house, apartment, townhouse)?
• Where to buy (state, suburb, street)?
• When to buy (timing, the cycle of property)?
The four fundamentals we consider the essentials for purchasing a property are:
Population growth – When looking at states and suburbs.
Is the population growth beating the national average? There may be some areas that are growing faster because of;
• new industry that has developed.
• Government support.
• Or there are new schools/services.
As a result, the above leads to more people drawn to that area.
Demographic – Are there retiaries or young and upcoming families or high net worth individuals?
• Generally, as a rule of thumb retiaries want to down size their homes and spend less on property.
• Young families want to stay stable for long periods to see their children go through school. Therefore, the areas of participation (soccer clubs, activity centres, and amenities) need to be accessible. As a result, will want to spend more money and stay longer.
• Or are they high net worth individuals/ couples that want to be close to amenities and entertainment venues.
Support System –The underlying services that support a suburb. These are very important such as amenities, prospering businesses, reliable transportation, variety of shops, restaurants, activities, parks, and atmosphere.
If you are aiming for families as your customer and in order to keep families in these areas there needs to be strong support system.
Jobs – Good employment. Without jobs people cannot pay for their rent. Are there jobs in the area or is it at risk of high unemployment? What industries are currently in the area? Can youth can get work? (you want them to stay in the area which means they can potentially buy property in that area). Is it accessible, are there good roads and easy commute.
All of the pillars are interrelated. It is essential that they work in unison so you can get the ultimate return on investment. They are reliant on each other. Therefore, understanding information and data collection are key.
It’s good to go out there physically and see what is going on in the area if possible;
• Are the suburb busy people around;
• Is there road work happening;
• Is landscaping kept clean;
• are their people spending time at shops?
With all the above its a lot of information to consider before investing. At J & J International we’ve done the work for you. So that you can spend time on things that really matter. Speak to our consultants to find out more.