Location, location, location… you have heard this one right ? It’s based on the choice of location of your investment property can make it a deal or a dud.
So what does make a great location for Property Investors right to make your next investment property a juicy nest-egg and not a lemon?
Choosing the right location for your investment property is definitely a key to its success. There are four key points that I will share with you in this article that make or break the location for your next investment property:
The 4 Signs of a great location for Property Investors
1. Diverse Employment base and strong employment growth
A broad, diverse, long term employment base is a must for a good investment location. Never invest in a one horse town. Towns that rely on one or even just a few key industries, companies or employers are not good for long term property investment. There may be some exceptions to this rule, like Canberra. However, I ask you what would happen to Canberra if Federal Parliament was moved elsewhere? What would happen to the employment base and therefore the property market? Sadly, there are many recent Mining town examples that highlight this fact. Property prices implode once the key industry goes into recession and companies have to reduce their workforce. They can come back, but until they do your nest egg will be on ice or in the deep freeze!
2. Established Macro-Economic Facilities
We like to focus in areas near established and considerable infrastructure like cities, town centres or regional centres. Especially important are macro- economic facilities like hospitals, schools, day care centres, shopping centres, banks, recreational facilities and government support services like Centrelink etc.
Many property commentators take the easy road and suggest Sydney, Melbourne or Brisbane as ideal locations to fulfill these criteria. However, price needs to be considered when choosing a location. And while Sydney ticks all the boxes for employment and infrastructure, with median house prices in Sydney currently around $1 Million, this does not suit many investors.
I suggest you look at middle to outer ring suburbs of large CBD’s or regional locations of significant size such as the Sunshine Coast, Gold Coast, Newcastle, Wollongong or Geelong. We will talk about price ranges in a later video but for the moment know that I suggest a price point between $350-500,000 to get the most bang for your buck. So stay tuned.
3. Micro-Economic Facilities
The existence of thriving micro-economic facilities like parks, coffee shops, take away shops, restaurants, bus stops and corner shops are a sign of a well-established community where people like to live, meet with friends and love living. Areas with engaged neighbourhoods and community centres, bowls clubs, RSL’s or surf clubs and other social activities are places were people like to raise families. An important aspect for a growing community and therefore the property investor.
4. Access and Transport
And finally, an important aspect is the access to an area, the entry and exit routes and access to highways and public transport (train, bus and airports). The more the better. It is not advantageous to have an isolated community from central locations which will affect the value of your property. (With regional areas sub 1 hour access to a major city is very important but not a substitute for the items in points 2 and 3 above.)
In closing, I want to mention don’t forget to consider the natural infrastructure of an area. Items such as beaches, mountains and the climate can have a positive impact on the property market. This does not compensate for the hard build infrastructure and employment generators an area may or may not have. It may be a lovely place to live but can people get jobs and pay their rent or their mortgage?
To help you evaluate a property location download our free checklist location criteria sheet by clicking the link below and entering your name and email. We will send the sheet straight to your inbox.