Blog post by Empower Wealth

Breaking the Golden Rules in Property: A New Perspective

When it comes to property investment, the phrase “location, location, location” has long been hailed as the golden rule. It’s the mantra that every seasoned investor knows, and it’s usually the first piece of advice given to newcomers.

But what happens when the tried and true starts to evolve? Are we beginning to break the golden rules of property? And more importantly, is that such a bad thing?

The Ever-Evolving Golden Rule: Location

The essence of the location rule remains strong—choosing a great street, with strong street appeal and livability, continues to be a cornerstone of property investment. However, in today’s market, we’re seeing shifts in how this rule is applied. Where once buyers would steer clear of properties near main roads or train lines, particularly in inner-city areas, there’s now a reconsideration.

Ben points out that buyers are starting to weigh the benefits of proximity to amenities against the drawbacks of noise or traffic.

In inner-city areas, where demand is high and space is limited, properties on busier roads or near train lines are becoming more attractive.

Buyers are willing to compromise on these factors if it means securing a home in a desirable suburb with good walkability and access to public transport. The once strict avoidance of these “less desirable” locations is starting to fade, especially when buyers see the potential for good value and lifestyle benefits.

School Zones and the Changing Landscape

Another rule that’s seeing more flexibility is the importance of school zones. Traditionally, buying within a coveted school zone has been a surefire way to ensure strong property value. But as Kingsley highlights, school zones are not as fixed as they once seemed.

Changes in school boundaries can significantly impact property values, sometimes unexpectedly.

Therefore, while buying in a school zone can still be a smart move, it requires thorough due diligence. Simply being within the zone is no longer enough; understanding the stability of that zone’s boundaries is crucial.

The Rise of Rentvesting

The saying “Rent Money is Dead Money” may not be as relevant anymore. As property prices continue to rise, another trend is shaking up the traditional rules—rentvesting. This approach allows people to rent in the area they want to live in while investing in a more affordable property elsewhere. It’s a strategy that flips the old notion of buying where you live on its head. Rentvesting provides the flexibility to live in a preferred location while building wealth through property investment in areas that offer better affordability and growth potential.

Off-the-Plan Purchases: Proceed with Caution

Off-the-plan purchases are another area where traditional advice holds significant weight. Kingsley advises against breaking the golden rule of due diligence when it comes to these investments. While buying off the plan can offer potential savings and the allure of a brand-new property, the risks are substantial.

Market conditions can change between the time of purchase and the completion of the property, potentially leading to a situation where the final valuation is less than the purchase price. This was seen in Melbourne’s Docklands area years ago, where an oversupply led to significant losses for some investors.

Is the Car Still King?

Finally, the need for off-street parking has long been considered non-negotiable. However, with changing lifestyles and the growing popularity of public transport, carpooling, and even car-free living, this rule is being reconsidered. In areas with ample on-street parking or excellent public transport options, the lack of a dedicated parking space is no longer a deal-breaker for some buyers. This shift highlights how urban living and transportation trends are influencing property decisions.

Conclusion: A New Perspective on Property Rules

The golden rules of property investment are evolving. While the fundamentals remain, the application of these rules is becoming more flexible as buyers adapt to changing markets, lifestyles, and priorities.

Breaking a golden rule isn’t necessarily a bad thing—if it’s done with careful consideration and due diligence.

As the market continues to evolve, the ability to adapt and think creatively will be key to making smart property investments.

At Empower Wealth, we’re here to guide you through these changes. Whether you’re a first-time buyer or a seasoned investor, our team can help you navigate the complexities of the property market and make informed decisions that align with your goals. Contact us today to find out how we can support your property journey.

This blog was first featured in this episode of 774 ABC Radio Melbourne, where Ben appeared on the new segment called, “All Things Real Estate”.

Ben and Richelle also share some of listeners’ experience and questions on property investment in Australia. Tune in to this segment for more.

Interested in having a chat about all things property investing? We offer free consultations, depending on what your needs are.

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Categories: In the Media

Tags: ABC Radio - 774, Asset Selection, Buying Process, Investment Decision, Location, On Radio, Research