When investing in property, one of the most important details to look at is the property location. The right location has a host of benefits such as more demand and quicker value growth and capital gains over time. It will also be a key factor in determining resale value and can make the property more attractive to tenants if you're considering a rental property. However, choosing the right location can be challenging and confusing. There are many factors to think about, from crime statistics and proximity to public services to housing market stats and trends in that particular area. Here, we discuss what you should look out for when picking the right location for your investment property.
ACCESS TO PUBLIC SERVICES AND AMENITIES
Easy access to transportation, public services, and amenities will drive up property values. In urban areas, every metre closer a property is to transport terminals can increase the property price. Many big cities are also seeing fewer cars every year; Melbourne may be entirely car-free by 2030, for example. People tend to favour locations with easy access to transportation services such as trains and buses as this gives them another option for travelling to and from their workplaces or businesses. Another thing to look out for is proximity to public services such as hospitals, fire stations, and police stations. Having easy access to these facilities results in more convenience for the property buyer or renter and tells them that, in the event of an emergency, they are closer to help. This is another advantage that can increase demand and the likelihood of a sale or rental contract.
APPEARANCE AND SAFETY
The overall safety and appearance of an area is another crucial factor in picking the right location for your property. A location that looks generally run-down or dirty might not get the same positive attention as an area that looks cleaner and well-maintained. The same goes for a location that has higher crime rates. Understandably, people will want to live where they feel safer. As such, it’s important to know that renters and home buyers look at crime statistics too. Having a location that has lower crime rates is another selling point you can use to gain more attention for your property.
KNOW WHAT'S IN DEMAND
Single-family homes, luxury condos, townhouses—understanding what type of property is preferred by more people in the location you’re eyeing is important. This will affect your strategy as well as your decision on what kind of property you should buy in that area. For example, if you’re looking for quicker returns on your investment, purchasing a single-family home in an area where condos are more in demand probably won’t pan out to be a good investment, at least in the short-term.
This is one of the many areas where our research-driven methodology, Calla Property Insights, can be of great help. We’ll do the research for you to ensure that you get the right property in the right location for your investment needs.
FAVOURABLE PROPERTY MARKET TRENDS
It’s also important to consider certain property market factors such as housing prices and vacancy rates. Knowing the current property prices and how much they have increased or dropped in previous months or years gives you an idea of a particular location’s performance when it comes expected ROI. This will also tell you how much financing you’ll need. Meanwhile, vacancy rates are an indicator of the percentage of unoccupied rental properties in an area. The lower the figure, the better since this shows strong rental demand. In most capital cities, vacancy rates have stayed roughly the same this year compared to the previous year, a good sign that the housing market is holding steady, or may be set to improve. Having lower vacancy rates also means less days that your property is losing money because of a lack of tenants.
BUSINESS AND EMPLOYMENT OPPORTUNITIES
Aside from convenient access to public services and transportation, you should also consider the local business and employment market. If the location is experiencing a rise in business and employment opportunities, it will likely see more demand as more workers or entrepreneurs settle in. Employment is always a key consideration for many people planning to relocate. As such, it’s important to avoid locations with higher unemployment rates.
You could also do a little research and see if there are many ongoing or planned infrastructure developments in an area in the next few years. More infrastructure projects could mean more jobs in the pipeline or better facilities for residents—two more factors that can increase property demand in an area and improve its property market potential.
The location or type of property you purchase can make or break your investment strategy. Therefore, it’s always wise to seek expert help when in doubt. At Calla Property, we specialise in selecting the best property, at the right time and the right value, for your investment needs. Our team of research-dependent investment property specialists will do the work for you, so you don’t have to worry about the stress of choosing the right property. Get in touch with us today so we can start helping you reach your property investment goals.
Disclaimer: No part of the information or calculations here are intended as advice. This is for general information purposes only.