8 key capital growth attributes to look for in an investment property.
1. Near major transport infrastructure. Think of transport in terms of time and cost rather than distance. Rail, major highway, airports are assets that drive capital growth.
2. Near Hospitals and schools. These necessary points of social infrastructure and by virtue of proximity to these assets create scarcity in property. Scarcity in property creates rising prices and price stability.
3. Inner city cheap neighbourhoods Most cities have inner-city pockets that are considered less desirable. Eventually urban renewal programs transform these areas to trendy, hip, . Often it is employed young people who work in the city but need affordable housing that discover the potential of these areas first. They will make great tenants.
4. Government policy & Urban renewal programs Town planning has a huge impact on property. For instance, recently governments changed policies to increase densities for urban land. Which means properties can be further subdivided, new dwelling added to the site, or increased number of apartments built on a block of land. Informed investors take advantage of town planning changes.
5. Regional Service nodes. In Australia some small or medium towns exist to service much larger rural regions. So by virtue of their location these towns become natural monopolies for service and supply industries for a particular region. As a result become very safe and stable businesses. The towns or cities become very stable in terms of population, rental and capital gain. Some examples are Cairns, Darwin, Aubry-Wodonga, Townsville, Toowoomba
6. Ripple effect As an area becomes popular and prices rise, nearby neighbourhoods will also experience increasing prices especially if there is population growth for the entire region. Sometimes skipping the the popular area and become an early mover in the lower priced next door neighbourhood is the best move.
7. Jobs Growth Major projects that create jobs growth also creates increasing prices. This is especially benificial to capital growth if the new jobs are higher paying than the average wages of the area.
8. Lifestyle locations Australians love to live near the sea, river, canal, lake, golf course, proximity to these resources create scarcity which is the crucial factor that keep properties prices rising.
These 8 attributes create scarcity and thus capital growth potential.
When looking at properties.
Make sure 3-4 of these attributes are present.
Increase your confidence in your selection process and avoid mistakes, it’s important.
Sometimes properties are cheap for a reason…and they will always be cheap in an area with no growth.
When your properties have 3-4 of the above attributes, then you have a great chance of above average capital gains.
I am happy to consult with you in sourcing your next property