Property Hot Spots: How To Predict the Best Places To Buy
Historically real estate has always been a good place to put your cash. It’s an asset you can feel and touch – unlike stocks or shares – which makes investors feel safe. And, in the right place and time, property can grow in value while you sleep, meaning as an investor you don’t have to do much to increase your personal wealth.
But as investors, how can we better predict the next hot spots for real estate investment so we can get in at the right price? How do we know the best places to buy that are guaranteed to grow in capital value, return regular rent increases and ensure future personal wealth?
BE AN ACTIVE, ENGAGED INVESTOR
ANZ bank recently adjusted its “pessimistic” forecast of a 10 per cent drop in capital house prices, to a more positive outlook, predicting a rise of 12 per cent in Perth, 9.5 in Brisbane and 9.4 for Hobart.
That’s all good news. The only caveat is that smart investors got into the Brisbane and Hobart markets years ago when prices were low and started to rise.
Property investors who are able to better predict how a market is going to rise or fall are paying close attention. They’re on the ground watching what properties are selling for, keeping track of reserves vs sale price and going to auctions.
In simple terms, they know the market because they’re investing some time and energy looking at it. And if they’re new to investing and they’re smart enough to know what they don’t know, they’re asking experts, like the team at Positive Real Estate, to help them on their journey.
SEE THE POTENTIAL OPPORTUNITIES
Events such as COVID-19 understandably rattle our cages and scare people off spending or investing. People like stability. But the truth is, COVID-19 or not, real estate markets are ever-changing and property values go up, and down, then back up again, all the time. That’s the reality of property and why we say it’s a long game, not a quick fix.
Being able to see past the scary headlines and see future opportunity, where others just see risk, is a great skill to have as an investor.
Currently, Melbourne property prices might be feeling the pinch. The Australian Bureau of Statistics reported a mass exodus of Melburnians in the three months to the end of June 2020, with people fleeing the city and prolonged COVID-19 lockdown periods, for regional areas with fewer restrictions. Property prices in the metro area dropped, as did rents, and vacancy rates for rental properties increased.
With all that doom and gloom you could be forgiven for avoiding Melbourne like the plague.
But all projections show that the city will bounce back and long-term effects will be slim to none. Add into that the fact that the Victorian government has recently announced billions of dollars of investment into infrastructure, which will grow the state’s economy, create jobs and drive-up property prices. Suddenly investing in Melbourne looks like the smart thing to do.
REMEMBER THE GOLDEN RULES
It can be hard to make absolute predictions about where to buy property, but there are some golden rules that never fail us.
- Stay close to the action – You don’t want to buy a property that’s more than a 30-minute drive from the CBD or a place economy. Proximity to infrastructure, jobs, opportunity and desirable lifestyle is always going to drive property prices in the right direction.
- Do your numbers – Make sure you have enough money to make the purchase you want and stick to your own budget. Ensure you have a personal buffer should your own circumstances change, and a buffer for each investment property you own.
- Location trumps property type – Say you have $400,000 and that will get you a one-bedroom apartment in a place that attracts money, wealth and a highly liveable lifestyle. Or it will buy you a four-bedroom house out in the bush, hours away from a decent coffee. Location trumps property if you want low vacancy rates, high rent and steady capital growth over time.
HOW TO PREDICT WISELY
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Rules are an important part of life. And rules in most cases, are really just another word for common sense. They give us a clear framework around many important aspects of life, so it’s no surprise when it comes to selling your investment property, there’s a number of rules you need to follow in order to get the best result.
If you want to know when to sell an investment property, or even if selling an investment property is a good idea, all you have to do is read the rules.
Most of us were raised with the idea that debt is bad. Debt drags you down. Rich people are never in debt.
While that may have been true for our great grandparents, it’s no longer the case. Debt is one of the keys that can unlock future wealth as a property investor. The more good debt you have, the more income you can create.
But, before you go out and put yourself $1 million in the hole, let’s talk about the right kinds of debt. The debt that’s going to lead to success, not ruin. This is called…
I’m sure you’ve heard – data is the new currency. It’s the next big thing for business and it will be a catalyst for driving the world forward over the next few years. Learning how to harness the power of data in property investing, will be a secret weapon all investors can use to create more wealth.
So, what is data? It’s information, insights and predictions that property investors can use to help them make smart property purchases.
This could be data around what’s happening in regions in terms of infrastructure and growth. Figures on what type of property is selling well in a particular location. Information on industry or employment opportunities in a city or regional town.
All of this kind of data can give property investors an edge into what, where and when to purchase in order to create wealth.
After a lot of bad news over the past 12 months – thanks a lot COVID-19 – it’s nice to be able to kick off 2021 with some good news. There’s going to be a lending boom which, if you have your property investment strategy in place, is going to make your life a whole lot easier so you can build your property portfolio faster and cheaper.
Like a fine wine, the value of property gets better over time. Traditionally, the more time you have an investment property, the higher the value will rise.
However, unlike your favourite Shiraz, property values can go up and down, and up again.
Getting to know how, why and who is valuing your property can help us understand what property to invest in.
There are three ways to value a property – and three very different people doing the valuing.
What are your Big Rocks this year? What are your Big Rocks for your property investing journey?
If you’re scratching your head and wondering if you’ve accidentally stumbled across a blog for construction workers, bear with me.
Big Rocks is a concept often used in business or life coaching to essentially describe your priorities. The theory is, if you don’t have clear priorities, or if you have too many, chances are you’ll let smaller issues distract you and ultimately fail in your goals.
According to the Australian Bureau of Statistics, 99 per cent of property investors in Australia fail. In this instance, the definition of failure is failing to buy three or more properties. Failure is easy. It takes very little effort to be bad at something. Success is something you have to work for, something that takes time and effort. But if you’re willing to put in the hard yards, we know you can succeed. We know because we’ve helped thousands of Australians buy property that’s yielded millions of dollars of income. To understand how to succeed, we need to know why so many fail. People fail because …
Part of being a successful property investor is being able to stay across a lot of moving parts. From analysing the value of different areas or types of property, to understanding inflation and different kinds of loan structures. It’s information overload and at times can feel overwhelming.
Information overload can lead to something we call “analysis paralysis” meaning, with so many decisions to make, you can’t make any.
When investing in real estate, smart investors know that buying well comes down to more than just the quality of a building or property. This is because one of the key factors to affect the capital growth and rent rate potential of property is infrastructure.
You need that income! One of the primary things you need to be a successful property investor is a job. Why? Because you need money. You need a job to borrow money. You need savings or some cash to buy your first property. But the sad fact is, a lot of people...