Property Selection Myth

Location, Location, Location was and still is the catch cry from most Real Estate agents when it comes to which properties outperform and which properties don’t. When a property investor is looking to make a property selection for investment, maybe we should adopt this principal but with a little more creative license.

 

Location One: Identification of an overall city or town to invest.

Given the monetary value of the investment ,you really only get one good shot  each time you choose to invest.  When one looks at Location One, the macroeconomic indicators of economic Growth, employment growth, incomes, industry diversification, workforce demand (employment), infrastructure and overall lifestyle drivers as the things that are in play when selecting a city or town to invest in.

Location Two: Suburb.

This is usually where the novice investor rests in terms of property selection. They often read or hear commentary about a hot spot (i.e. Suburb) and think that’s all they need before they go out and secure a property, and if they have done well, then they will ensure they see steady growth.  When it comes to a suburb assessment, you start to drill down to things like transport, localised amenities, lifestyle options, shopping & schools options within easy access etc.  But this won’t in all cases assure you of an outperform result.  That prize comes with the final selection piece in the puzzle.

Location Three: The localised neighbourhood and the property itself.

There are too many factors that me and my team look at to fit into this article, but I am going to give you some insight. Localised neighbourhood is all about the immediate vicinity within 1km of your property. Most importantly the street, traffic, parking, local stores, parks…getting the picture? When you like a street or area and how it appeals to you, then hopefully your tastes will be that of the broader market as with demand goes competition and property value increases.  The actual property itself needs to be in high demand for those wishing to live in this area. It needs to have a ‘scarcity’ value to it, like a classic car improves with age, so does classic property as they grow in value quicker than properties that don’t have this ‘X’ factor – that’s what the experienced trained eye looks for.