What makes a great investment property? It’s a question often asked and with good reason. While it’s an obvious query, the answer is complex and must take into account a lot of different factors.
Although by no means a comprehensive list, these are the main points to target when searching for, assessing and purchasing an investment property.
Strong land value is a shared characteristic of great investment locations. Land is always a premium in top performing investment areas – it’s hard to come by, and certainly not easily accessible.
multifaceted demand. These are properties and areas that appeal to a diverse range of buyer profiles, such as families, downsizers, upsizers, investors, and renters alike. The rivalry among these buyers guarantees robust demand and pricing.
Proximity to public transportation is a big factor. Whether it be commuting to work, travelling to entertainment events, or journeying to school – being close to trains, trams and buses is always desirable.
Access to quality education facilities is also a major driver, encompassing both primary and secondary, as well as private and public school options.
Public open space is another characteristic that’s highly sought after. There’s a reason Victorian license plates for many years were labeled with the ‘Garden State’ slogan. We love our open spaces, whether it be parks, ovals, beaches or rivers. This was reiterated and amplified during the pandemic lockdowns.
A nearby village that provides a sense of local community is in high demand. This trend has grown notably in recent years, as previous shopping districts that declined in the 1980s and 1990s are now revitalized through the emerging café culture across various neighborhoods. Noteworthy illustrations include Rathdowne Village in North Carlton, Burke Road in Camberwell, and Ormond Road in Elwood.
Employment opportunities are also a factor. Infrastructure that provides large numbers of jobs, such as hospitals, is an attractive proposition. It definitely creates strong demand from a tenancy point of view.
Particular attractions within suburbs also wield significant influence. For instance, in Bayside neighborhoods, the allure of the beach greatly appeals to numerous buyers. Meanwhile, in inner northern suburbs such as Fitzroy and Collingwood, the prevalence of pub culture holds great popularity.
Whether you’re looking for your first home or an investment property, it is worthwhile to look at the crime rate of the neighbourhood.
Areas with a low crime rate are far more desirable to live in than those with a higher crime rate – people are willing to pay more to live in a suburb where they feel safe on their doorstep and this higher demand helps to support property prices.
Gentrification is a process of urban renewal and revitalization in which previously neglected or deteriorating neighborhoods experience an influx of wealthier residents, increased property values, and often, the transformation of the area’s character.
Gentrification is a positive factor for property investment because it brings economic benefits and improvements to an area which in turn creates more demand and therefore attracts higher prices for local properties.
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