Big Benefits In Looking Beyond Your Backyard
As property investors, our primary goal is to buy a property that will create wealth – a good rental yield plus strong capital growth. Whether you’re aiming for negative or positive gearing, the goal is to gain financially from the investment.
So the key is to buy well, manage well and sell well.
Let’s take a look at buying well. Sometimes, the best investment opportunities are right at our back door. We love them because we know the market, we can see what we’re buying and we feel pretty confident that we know what we’re getting into.
But this isn’t always the case and it’s a good thing to spread our net wider before you make your decision. You don’t just want a good investment. You want a great investment.
To find that great investment you need to have a look at markets all around the country.
What you’re looking for depends on your financial goals and your budget – so spend some time clarifying those before you begin your research.
The things that the experts are looking for are:
- infrastructure investment,
- population growth and
- employment opportunities and
- demand outweighing supply.
Where there is infrastructure investment, such as new transport links, upgrading airports or hospitals, or new shopping centres, there will be people. People to build it and work there but also people wanting to live near the new facilities.
The demand part of the equation was a problem for many investors in Brisbane apartments over the past decade. The city, and property investors, took a hit from too many cookie cutter developments that were all completed around the same time – and supply overtook demand.
Things are different in Brisbane now. The council has come to terms with the amount of Development Applications that should be approved at any one time and the type and design of dwellings that are being built. The city has more than eight major infrastructure projects due for completion in the next five years. Two of those are Queens Wharf and the second runway at the airport. Those two projects alone are forecast to provide employment for over 20,000 people. That will create a huge swell in housing demand.
So right now, there are pockets of Brisbane that are ticking all the boxes – and the entry price is lower than some other cities and yields are good. For some, this could be a great investment.
Further north on the Sunshine Coast, there’s more investment with submarine broadband cables being laid that will provide superfast broadband connection to Asia and the USA, attracting major corporates to the area. Maroochydore airport is being upgraded, roads, shopping centres and health precincts are being upgraded. There is investment, there are people, there is housing demand.
South East Queensland also benefits from the highest interstate migration in the country, so population growth for the region is forecast to continue to be high.
Moving south to the Hunter region, pockets of the city of Newcastle are undergoing gentrification, there are major upgrades for the RAAF base and the airport, new estates are being developed and there’s strong demand for housing and investment price is relatively low. The performance in this region is solid – both for rental yield and forecast capital growth.
Sydney and Melbourne have been the hardest hit of the capital cities with the recent price correction, but they’re still performing solidly if you buy in the right area. There are some excellent opportunities available in Melbourne, but it is all about researching to find them.
These are the areas that are on our radar. They’re ticking all the boxes for a good long term investment.
We’ve recently put a client into a beautiful development in Maroochydore. This is an area that she would never have thought about, but it met her goals. She paid $459,000 for a three bedroom villa. Rental yield is very high and it’s positively geared. For her next property she will be looking for something that is negatively geared but still with a forecast for strong capital growth.
Property investing requires research. You need to find the location and the property that will meet your financial goals and it may not be in your own backyard.
Spread your net wide, think about what you want to achieve and do your homework.
Research is the key.