When you look to invest in real estate, there are many different factors involved in whether or not a certain property will yield a high return on that investment. There are also different types of investing, including flipping for a profit or renting a property out. Regardless of your plans with the property, finding real estate in a lucrative area ensures that you will have a solid investment that will withstand drops in the overall market.
Rather than just jumping on board to purchase property in the up and coming areas, you should know the factors to consider to accurately assess whether the neighbourhood in which you find the property will facilitate an increase, rather than a decrease, in value over time.
When searching for lucrative areas, one of the first considerations to make is the local schools, as this will help you to draw in better renters, including long-term tenants. Tenants with children, or those who are even considering children in the near future, will be attracted to areas with schools that have a solid reputation with the plans to remain while their children are in school. You can search online for rankings of the local schools, or discuss it with your real estate agent, who should have an idea about the local schools.
Another important consideration before you choose your investment property is the additional expenses that arise as part of your holding costs. You should look closely at the likely property maintenance, strata fees and council rates because these will affect how much you can net from your rental income. By finding out the expenses, as well as the average rent, you can determine how much you are left with and whether it will be a good investment.
Quality of the Neighbourhood
The quality of the neighbourhood goes beyond just the schools. Crime rates and unemployment can also affect how strong a neighbourhood is, as well as if property in that area is currently appreciating or depreciating. Signs of gentrification, such as large development projects and the increase of boutique and high scale stores, also demonstrate the area will likely yield a valuable investment. Neighbourhoods surrounding recently gentrified or hot neighbourhoods also make for solid investments, as they are often the next in line to be converted.
Where to Invest in Perth
The most lucrative areas for investment property change from year to year, depending upon current development, growth, decline, unemployment, crime, and other factors. Currently, some of the top established suburbs for investment property in Perth include Riverton, Kingsley, Woodvale, Doubleview and top upcoming suburbs include Coogee, Coolbellup, Caversham and Dayton.
As our property market is starting to slow you can get a better deal on the price of real estate, and in these suburbs we have strong demand from renters. The fundamentals of the Perth market are still strong and with lowering interest rates, modest growth is expected. Long term, these types of suburbs will continue to outperform so it is best to invest when you can and don’t try to time the market or else you will be left on the sidelines wishing you had of bought when you could.