When we look to buy a house for ourselves, we usually look for houses that are in well-established suburbs, close to schools (if we have kids), close to shopping facilities, including supermarkets, malls, and petrol stations. We look at transport links, recreation opportunities and green space. We expect that we’ll pay more for a property in a well-resourced area in a poorly-serviced area.
The same is true of rental properties. There will usually be higher demand for properties that are close to amenities and essential services. Higher demand will generally mean higher property prices and therefore higher potential rental prices.
While buying a property that is well serviced is an important consideration, the type of property you should look to buy as a new or early stage investor will depend on your financial position and your investment strategy.
One strategy adopted by investors is to invest in areas where growth and improved infrastructure is planned. Perhaps new schools, shopping, businesses or industrial parks are being planned in the area. The hope is that buying before development starts will ensure a reasonable purchase price for a property that will improve in value and be in high demand once the infrastructure is established.
There are risks to this approach, though. Planned infrastructure projects are not the same as well-established, well-utilized infrastructure services. While there could be an argument for buying an investment property in an area slated to be developed, it is not a strategy we recommend for a new investor without all the appropriate information and advice. If you are looking to adopt such an approach, please talk to us first. We will look at your portfolio and make sure you understand the benefits and risks.
We will look at how important the location of your properties is to growing your portfolio and make this an important consideration in helping you develop your strategy.