It’s common for many property investors to ask which suburb will be the best one for them to buy a rental property. Most people seek to invest in growing suburbs. They want to know they’ll get good value for their money and the potential for healthy capital growth in the future.
Of course, no one has a crystal ball that allows them to predict with absolute accuracy which suburbs will perform best. However, there are some indicators to look for that could help you locate growing suburbs.
Here are our tips for choosing a growing suburb for your next investment property:
Supply and demand
The basis of capital growth across most property markets is the anticipated increase in demand. People choose to live in locations that are convenient for their needs, whether it’s for work, schools or lifestyle.
To make the most of those things, look for properties in close proximity to transport, hospitals, shopping centres, universities, child care facilities, parks, or other amenities.
When considering a suburb for its potential for increasing demand, look at locations that provide a range of conveniences and amenities that appeal to prospective tenants or future property buyers.
Ripple effect
It’s common for the most popular suburbs in almost every city to already have experienced a price peak following a boom, so buying in those locations could mean the opportunity for capital growth has already passed.
By comparison, suburbs around those peak areas have the potential to benefit from the ripple effect of the popular locations. It’s likely that neighbouring suburbs are poised to boom next as tenants and buyers begin moving to the next best option.
Infrastructure
Keep an eye open for any planned infrastructure upgrades or additions. Properties located near convenience amenities are always popular with tenants and buyers alike.
Look for areas near train stations, shopping centres, schools, or planned transport upgrades, such as new railway extensions, bus routes, or major highways, roads or bypasses. Likewise, areas with planned parks, lakes, bike tracks, child care facilities and other estate planning facilities are also highly sought after by families.
Most local councils and government transport organisations provide information on their websites about impending plans for infrastructure upgrades or additions that have the potential to impact future capital growth in those areas.
Think outside the square
It’s common for many property investors to prefer properties close to the areas where they grew up. However, there are massive opportunities outside of those immediate areas you could be overlooking.
The increase in the number of single-person or couples dwellings in recent years means the demand for smaller, low-maintenance properties is increasing in inner-ring suburbs around capital cities and beachside suburbs right across the country.
Professional couples seeking close proximity to work or couples downsizing out of the family home into low-maintenance properties with smaller yards are increasing the demand for such properties.
On the other hand, many families prefer living in more affordable areas that are often located in the outer ring of suburbs. Newer developments attract families to buy and rent newer homes with all the mod-cons at more affordable prices, especially if they feature family-friendly amenities that provide lifestyle options they need with convenient transport options for commuting to work.
If you’re searching for favourable, growing suburbs for your next investment property, take the time to look at a range of suburbs and locations. You might be surprised at the options available you might otherwise have missed.
MORE INFO:
Kym Russell
Finance & Property Consultant
e: krussell@nieuvision.com.au
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