Infrastructure that Skyrockets your Property Wealth

by | Sep 4, 2020

You’ve probably heard it before, infrastructure is vital to your property investing success. 

Here’s why you should consider current and future infrastructure when making an investment decision.

    First off – what is infrastructure?

    Investing in houses offers the prospect of capital growth to increase our wealth rather than through rental returns. Land increases in value, whereas buildings depreciate, so typically properties with more land are well placed for growth.

    Infrastructure is the building and landscapes that provide essential services. This infrastructure  drives growth in the economy and boosts employment and productivity. 

    In simple terms, infrastructure are the buildings that employ you, they help you live and move around.

    Here are the main three categories: 

    1. Utilities: electricity, gas, communications and water
    2. Transport: train stations, freeways, roads, airports etc. 
    3. Social: schools, hospitals, shopping centres 

    Why does infrastructure affect you as a property investor 

    Most people don’t want to travel far for work, they want to be close to the shops, the beach, entertainment and schools etc. 

    You don’t want to be stuck in a car your whole life do you? 

    This desire to live close to key infrastructure has a big impact on the demand for property. People are willing to pay a premium on a property if it is nearby what they need. This is why properties in good areas with good infrastructure outperform other properties. 

    Infrastructure impacts demand and demand impacts the price of property. So when researching investment properties. You are not just researching the property itself. You are researching what is around the property. 

    Here is infrastructure that can help drive capital growth and increase your overall wealth. 

    Employment Hubs

    You’ll notice that properties generally get more expensive closer to a CBD or city. A key reason for this is cities are large employment hubs. 

    There is a demand to live close to work, if a location has easy and quick access to employment this can have a big impact on property prices. 

    Don’t just think about CBDs, there are also other employment hubs such as hospitals, universities, large shopping centres and airports. 

     

    As the population in Australia continues to grow, so does the demand for properties around the city.

    Roads

    Good roads reduce travel time and improve traffic conditions. Freeways and highways can help you get from A to B in a shorter period of time.

    Public Transport

    As traffic gets worse and worse, public transport has become the preferred mode of transport for many. Trains make it easy to get around and reduce the need for a car. This can have a positive impact on property prices.

    Parks, Sporting Venues & Outdoor Spaces

    Parks, sporting venues, gyms and outdoor spaces help boost the liveability of a suburb and creates a sense of community. Nearby access to these can have a positive impact on a property.

    Hospitals

    Hospitals average thousands of visitors a year and are huge employment hubs. The Healthcare Sector contributes over 10% of Australia’s GDP. Hospitals are a positive driver for capital growth as they generate demand.

    Universities

    Universities are also large employers with a big population. 

    It’s desirable for students & teachers to live close by. This demand for property in close proximity can help property prices and also lower rental vacancy rates.

    Schools

    School zones are important. Good quality schools are in high demand these days and families will do what they can to live in a school zone of their choice. Parents also don’t want to travel far to drop off their children, so the demand to live close by can play a part in the desirability of certain properties.

    Entertainment & Shopping

    Who doesn’t like a good coffee? We all want to live close to the shops and restaurants. 

    It’s an advantage to be near local shops and this is something renters and homeowners generally enjoy.

    Water

    There is only a certain amount of real estate close to water. I’m mainly talking about beaches here. Because there are a limited amount of options, beach real estate is highly competitive and you will pay a premium. Properties close to the beach also demand a premium for rent as these are desirable places to live.

     

    Before you go buying a property based on the above. You need to factor in a whole range of other drivers for property growth. Being close to a good school, shops or the beach alone won’t automatically lock your investment property in for outstanding long term growth. However if you purchase a property that is in close proximity to most of this infrastructure, you are setting yourself up for success. Remember it’s not just about the property, it’s also about the suburb and infrastructure around the property. 

     

    Infrastructure is a key ingredient for your property investing success. That is why location is SO important. 

     

    If you’ve been searching the markets but still aren’t sure where or what to buy, consult with a professional property advisor. Find someone who is a seasoned investor with a proven track record of delivering quality advice that you can count on!
    If you’re after more tips related to Property Investment, you should join us at our next Property Investor Night and meet with our wonderful Coaches. You’ll be able to ask them any question you want and it’s a free event! Book your seat here.

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