What suburb do I buy an investment property? Wow, if I got a dollar for every time I was asked that question. Perhaps the easiest answer is research, research and more research because location, location, location is not always the reason to buy in a particular suburb!
Yes, I could tell you right now where to buy but there is more to it than that. For example, I could say buy in Sunbury outside of Melbourne in Victoria. But I’d need to back that up with research and at the moment this would not be a good investment.
Beware of other people who say ‘I heard that the new hot spot place to buy is XYZ’. Do they work in the market everyday? Do they know their research? Are they familiar with planning regulations? Or is it just something they’ve heard where someone has made a good profit. Because frankly, it’s pretty easy in today’s market to make a reasonable profit. But to take a buy and hold focus, there is much more to take into consideration.
Research will tell us what’s happening in an area including what the council has planned, the different types of zoning laws and how they may change in the future.
Further, the supply and demand of an area will determine the average rental return percentage. If there is an oversupply expect a low rental return, no matter where the suburb is. If, however, supply is low, expect a high rental return that is better than the state average.
Where an area has high demand, ask yourself why. If you can answer that question, but that area is out of your reach financially, start looking at the reason or reasons you came up with and look for other suburbs with the same attributes.
As always, if you have any questions, leave a comment below.
Until next time,
From the desk of Christine.