Featured, News

Five tips for successful property investment

 

It seems these days that there are endless streams of property investments popping up.

There is a lot more to making money through property investing than simply purchasing something and hoping for the best.

While there are many reputable companies out there, it’s important as an investor to have a good understanding of what you should be looking out for – and most importantly what to avoid.

 

  1. Location, location, location

It’s an old cliché but the location is the first thing you should consider when you are purchasing an investment property. There is no more important factor on the list of property investment strategies. Look for somewhere with good proximity to public transport and local amenities. In Sydney, being close to a train station adds enormous value to a property. If you’ve ever tried to drive in Sydney during peak hours (6am to 9.30am & 3.30pm to 6.30pm), you would understand how valuable it is to be near public transport. Not being subject to traffic congestion adds to quality of life, and this in turn adds dollars to your asset. Having other facilities nearby also plays a vital part in your property’s rental demand and growth potential, so look for proximity to schools, hospitals, parks and shopping centres etc.

 

  1. PIE – Population, Infrastructure, & Employment

Population

A growing population will ensure local demand and push for an increase in the supply of housing stock. Sydney has recently seen a lack of supply in property which in turn has pushed prices for apartments and houses upwards. Governments have been working together with developers in an attempt to increase the supply of housing, with the hope that homes will become more affordable for Australians in the future.

 

Infrastructure

Without a proper infrastructure, a resident’s quality of life is compromised and this in turn will have an adverse effect on the value of your investment property. People need to commute to shopping centres, schools and work in order to be happy and comfortable in their home. Look for areas with new infrastructure to give your investment a boost. For example, the Bennelong Bridge in Wentworth Point provides a valuable connection from homes to businesses and has caused a rise in local demand – which brings a higher potential for capital gain for properties in this area.

 

Employment

These days, people are not keen to work too far from their home. About a 40 minute commute is the maximum people are willing to take on each day. Buyers and renters prefer a home that is close to work, but also close to lifestyle attractions. This is why apartments in inner Sydney consistently show strong capital growth. The current generation spends very little time at home, and much more time working, socialising and exercising. Today’s lifestyle sees people meeting up with friends after work, having drinks after work, lunch in restaurants, movies and parks. Even on the weekends people are outside of their homes. These factors all play a role in deciding which property will suit a lifestyle, so it should play a role in how you choose your investment property.

 

  1. Surrounding development

Pay attention to surrounding retail, commercial and residential developments planned for the area. If there is a new shopping centre or retail giant opening close by, it is good for investment purposes. For example, when Woolworths opened in Wolli Creek, property prices were boosted by around 15%. Rejuvenation of Top Ryde City Shopping Centre has increased the property prices by around 20%. We might expect the same thing in Wentworth Point as Coles has confirmed a new shopping centre in 2018. Major retailers like Coles and Woolworths are very good at their due diligence and research.  If they open a store, it means they predict future growth in that area and this bodes well for local property values.

 

  1. Price Point

Every investor needs to compare as many similar properties as possible. You need to do your homework and look at current listings, recently sold properties and properties sold 12 months ago. The ripple effect also plays a large role in property prices so consider looking for better value in neighbouring suburbs to more expensive areas. Campsie prices are high because Burwood is already higher. Riverwood prices start to bump up because Kingsgrove, Beverly Hills, and Narwee prices are high.

 

  1. Developer background

When you purchase a property off the plan, you are purchasing the goodwill of the developer. You only bring home contract of sale that has been signed by developer. Nothing that you can see visibly or use to provide rental income. Therefore, it’s best to stick with good and reputable developer with a proven project portfolio. Be wary of smaller developers who are new to the Australian property market. Reputable developers rely on repeat and referral business to sell future projects so they needed their customers to be happy and content with their property purchase.

As a side note, we have worked on over 100 projects over the past four years alone.

 

View from one of our recent successful off the plan investments
Top Ryde City Living
5 Pope street, Ryde
Only 13 kms from Sydney CBD
Good public transport (7 bus services direct to city)
Client purchased off the plan in January 2012 at $595K (no stamp duty) Sold November 2016 at $850K. Total investment $120K. ROI is around 200%.

 

The team at Capital Value International Group would like to take this opportunity to wish you a happy and safe holiday season and a very Merry Christmas and New Year.If we can help with any of your real estate needs please get in touch to discuss an investment strategy that is perfect for you.

If we can help with any of your real estate needs please get in touch to discuss an investment strategy that is perfect for you.

 

Chandra Leonardi

Principal

Capital Value International Group

 

About the author

Relative Posts

One Comment

  • Wayne August 16, 2018 at 4:20 am

    Thank you for the great article

    Reply

Leave a Reply

Leave a Reply

Your email address will not be published.