Hi, I’m a first-time forumer…and an about-to-be investor
The question that has been playing on my mind lately as I read all sorts of information about property investing is…
Why is it suggested by many investors to purchase properties in an area of high growth? Has it not seen much of its growth already? Or if the area has experienced a lot of growth is it likely that it will continue to do so? Is it not better to find an area that hasn’t experienced growth yet – or is this too high risk? Apart from obvious criteria like good employment, coastal etc what should i be looking for? It has been suggested in some books to follow the population growth as a good indicator of areas that will go ahead, but in NZ some of the top areas of growth actually have a declining population!? Hmmmmm..Confused…
Thanks
NatalieI prefer to invest for growth because that is how you increase your wealth.
As for finding areas that will grow – population growth is what drives real estate prices.
But as Jan Somers says – its time in the market that is important. The longer you hold a property the greater the return.
As she says – when is the best time to buy a property? Anytime – as long as you can afford to hold it long term.
Good Luck.
NTowler,
I think it’s a valid question. I would prefer to buy in areas that have had little to NO growth, than ones that have had CG or 100 in the last two years. Why would I buy in Ipswich, for example, that has had amazing growth, and pay $200k for a property I could have bought for $100k two years ealier? People want growth for the properties they already own… not necessarily to pay double for a place that has experienced past growth… anyway, past growth is no indicator of future growth. I quote to you a quote from an article on Neil Jenman’s site, for example.. This is an article by a NZ property analyst, whereby Kieran Trass says:
“The areas which will have a significant drop in values as a result of NZ’s property slump will be:
1) Small towns (where many Australians are buying! These Australians have never seen small town NZ in tough economic times…)”
http://jenman.com.au/NewsArticles1.php?id=95
As with all purchases, you want to buy at “good value”. It doesn’t mean veritable stealing from a vendor. It means finding locations that you might consider “under-valued”. Some people find these areas by checking boom suburbs, and then loooking at neighbouring suburbs. Sometimes, the neighbouring suburbs might be dodgy… and that’s why they haven’t achieved CG. Or maybe it’s just your own good luck! A lot of finding places that still represent good value for money is just sniffing around, and doing a lot of research.
I myself like “growth” properties- ie not pozz geared, but ones that have potential to achieve CG at some point… but I won’t pay top dollar (I can’t afford it anyhoo). I like to find properties that have had little CG in the past few years… have a decent rental yield *for me*- of 6%-9%, and that achieve CG *after* I buy them…
kay henry
Buy before you die, that bus is around the corner. Just kidding, Ipswich is still a good long term investment if you look at infrastructure developement Kay and long term density planning. Logan as well is great as the first ever 13 storey building is to be built there soon. (SHHHH its a secret).
Good luck in choosing the right areas to invest.
Always do your own research, then do some more.DD
Don’t sweat the small stuff,and it’s all small stuff!!
the key thing is to look for suburbs that adjoin ones that have had high growth. as an example, Trigg in Perth went up 75% last year (or was it the last 3 months, cant recall). anyway the suburb next to it would be a pretty good bet. You need to compare the suburb’s long term growth rate with its 12 month growth rate and see if it is underperforming of late, in which case grab it. but dont forget the numbers can be very misleading and you need to make your own judgement call on whether it is the land that is going up or just people spending a lot on buildings.
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
You must be logged in to reply to this topic. If you don't have an account, you can register here.
