Main content ]]> ]]> ]]> Home Compare deals Finance news Managing money Investing Home & property Credit & loans Life stages Tools & guides Small business Home > Home & property > Property investment > Investment properties: Supply and demand says inner beats outer Print
Investment properties: Supply and demand says inner beats outer | Updated: 2:17:39 PM, Friday April 19, 2013
By David Adams
Looking to buy an investment property but not sure where to look? Three top property investors share their top tips to get you on the right path.
Illustration: Sam Bennett
BigPond Money deals
1 – Look in the inner city rather than the outer suburbs.
“Properties close to the CBD are in shorter supply than those in the middle and outer-ring locations, so they’ll always be in demand,” says Melissa Opie, managing director of Keyhole Property Investments. She advises that in terms of long-term capital growth, someone who has, say $700,000, to invest is better off buying one good-quality property in an inner suburb than two $350,000 properties elsewhere.
2 – Ensure the house is located close – but not too close – to lifestyle amenities.
“Zone in on areas that are well served by private and public transport infrastructure, close to village-like shopping strips, and with easy access to good schools and hospitals,” says Richard Wakelin, a director with Wakelin Property Advisory. ”These areas are always in high demand from buyers and renters – your customers – alike”.
3 – Don’t be afraid of buying something that needs a little work.
Capital value can be “manufactured” through refurbishment, renovation or redevelopment, says Michael Yardney, founder of Metropole Property Strategists. This may mean sprucing up a kitchen or putting in some airconditioning. But the advice comes with a caveat.
Mr Yardney suggests, as a general rule of thumb, spending about 10 per cent of the property’s value on renovations, adding that the big challenge for home buyers is to ensure they do not overcapitalise.
4 – Buy something that stands out from the crowd.
“Stick with scarce assets that aren’t being built any more,” Mr Wakelin says. This includes houses constructed in in-demand period styles such as Victorian, Edwardian and art deco. He adds that people should avoid buying off-the plan McMansions on the city fringe.
“There is no scarcity of supply for these properties.” Mr Yardney says when it comes to investment, he looks for property “with a twist … something unique, or special, or different or scarce about the property”.
5 – Suburbs and streetscapes that offer a sense of architectural consistency are generally more in demand than those that do not.
“Suburbs with a melting pot of styles – from fibro shacks to 1960s brick veneers and the ’90s McMansions – will never hold their value as well as areas with predominantly classic architecture styles such as Federation, Californian bungalows, Victorians [and] art deco,” Ms Opie says. Finally, investors are advised to avoid buying near industrial sites.
Tips for buying an apartment
- Buy in a block with an active owners corporation to ensure the property is well kept.
- Small is OK but layout is important. Make sure, for example, that in a one-bedroom apartment the bathroom can be entered without going into the bedroom.
- An outdoor component such as a courtyard is essential.
- Avoid locations close to parking or rubbish bin areas.
- Be cautious with regard to off-the-plan or brand-new. Established apartments may hold their value better.
- Off-street parking is a must.
Join our community on Facebook.
- Paying off home loans faster
- Millions may have overpaid land tax, rates
- Australian project wins world’s best apartment
- 5 ways to pay off your mortgage faster
- A plague on Aussie housing
- Where to for house prices in 2013?
- ‘Great Australian Dream’ fading, apartment ownership rises
- One shopping basket, four supermarkets, who wins?
- How best to manage tradies
Share this article |
Leave a comment
Follow this conversation Name: E-mail: Your URL: Comments: Follow any further comments to this article. All comments are moderated. Enter security code:
Follow this conversation
Leave a comment Your e-mail: You will be emailed when any additional comments are approved by the moderator. You are only subscribing
to comments made to this article. You may unsubscribe via the link provided on notification emails.
New top home loan 5.01% p.a. Apply by 20/5
No annual fee + 0% balance transfer 6 months
Fixed term deposits, lock in up to 5.00% p.a.
Compare low rate home loans from 5.01% p.a.
Super savings rate, earn up to 5.01% p.a.
Compare great credit card rates
0% p.a. balance transfer for 6 months
Low rate card
$58 annual fee, 2.5% p.a. on balance transfers
Bonus 10,000 Membership Rewards
Intro rate offer
Qantas American Express Discovery Card
0% p.a. intro purchase rate for 6 months
Compare great home loan rates
loans.com.au – comparison rate 5.12% p.a.
No annual fee
Say NO to fees! Compare fee-free home loans.
Compare home loans from 5.12% p.a.
5.34% p.a. 3 yr, offset account with redraw
5.67% p.a. $0 upfront fees, free ongoing fees
Compare great term deposit rates
4.35% p.a. fixed for 3 mth, from Bankwest
4.30% p.a. for 90 days, apply online, no fees
4.30% p.a. for six months, loyalty bonus
4.40% p.a. fixed for 1 year, from Bankwest
3.25% p.a. for 30 days, no account keeping fees
Compare great savings accounts rates
4.80% p.a. 6 mth bonus, Bankwest TeleNet Saver
Super savings rate, earn up to 4.80% p.a.
4.82% p.a. RAMS Saver, deposit conditions apply
4.25% p.a. Virgin saver, absolutely no fees
4.65% p.a., 4 month bonus rate
Related guides and tools
A bridging loan could get you in deep water
A bridging loan can tide you over while you sell your home, but an impulsive decision …
The Aussie developer of Sea Sentosa in Bali can’t believe his luck at winning the title …
The third highest house price ever recorded in Sydney has been notched up with the sale …
More than 2 million official land valuations in NSW will be examined by a new inquiry, …
Coin collecting for fun and profit Super changes announced Pent-up demand gets season off to a strong start Families dictate trend for high-rise living Property Market Review – Winter 2012 The end of a house price hiatus First home buyers going into hiding Home buyer caution deepens
Find a lower home loan rate! Compare home loans Give your loan the boot! Compare home loans Don’t get a shaky home loan! Find home loans Go
Sign up to receive the latest finance news. Email: Subscribe
Connect with us on: Facebook Twitter LinkedIn Google+
BigPond on Facebook
Tools & calculators
Try our budget calculator to see where all the money goes.
- Home loan borrowing calculator
- Credit card debt repayment calculator
- Credit card health check
- Home loan repayments calculator
- More tools and calculators »
Currency converter »
Convert: From: To:
Convert Amount: Data supplied by Morningstar, based on a 30min delay.