Selecting the right property for YOU is the most important thing when it comes to property investment. You want to get this right.
This is also one of the trickiest things to get right when investing in real estate. Many people think there’s a right answer to basic property questions like:
- Where’s the best place to buy?
- Is it better to buy new or established?
- Are houses better than apartments?
- Are capital cities better than regional areas?
The reality is that the right answer to those and other property investment queries depends on YOUR circumstances – your age, your financial position, what you already own, your goals, even your personality – and a whole lot more. That’s why it’s so important for prospective investors to seek help from qualified professionals in finding the right property for their portfolio.
Property investors should take a lesson from their share market counterparts, with diversification the key to building a successful real estate portfolio.
Property investment expert Tim Graham of Reventon – guest presenter on the webinar Selecting the RIGHT Property for YOU – says the one thing all investors should do is diversify by buying properties in different locations.
“Think about it like your superannuation,” he says. “If you’re in a typical balanced industry fund, it’s not all invested in one stock. You should think about your property investments much the same way. You might have a property in Victoria performing at 5% one year and a property in New South Wales performing at 8% – and you’ll have an average return of 6% or 6.5%. “It means that if you’ve got properties in multiple locations across a ten-year period, you’re going to have a much safer portfolio.”
Graham says investors commonly ask where is the perfect location to buy, but the answer depends on the individual. Six people may ask that question and there can be six different answers. And it’s important to choose location well. Although many real estate markets across Australia are currently booming, investors mistakenly believe they can buy anywhere and it will perform well for them.
The first thing investors need to work out is what they can afford and then start looking at areas that suit that budget and have the potential for sustainable growth. “Essentially they’re looking for a location that hasn’t peaked yet on the property clock,” he says. “Which markets look like they’re about to take off?
“My job as a buyer’s advocate is to try to find value and, right now, I’ve got to say that’s very, very hard, especially in the established markets. I can look at a property and work out what I think it is worth and tell that to the client – and then, a week later, somebody else is paying $30,000 to $40,000 more for it.”
Graham says anyone can pay a premium to secure a property but it is more important to find value when purchasing an investment property, which in the current market can be a slower process. “I’d rather get investors the right property, than jump into something for the sake of getting the deal done tonight.”
He says locations which are worth considering for investment at the moment include Springfield, about 40km south-west of Brisbane in the City of Ipswich. The master-planned community has substantial amenity, a train station connecting to central Brisbane and affordable properties for less than $600,000. Also worth considering are nearby suburbs such as Ripley or Greenbank, where it was possible to find good properties for less than $500,000.
Graham says Toowoomba in Queensland is also a region worth considering for investment, as he believes it has the same potential as Ballarat, as it has a similar population, great infrastructure projects under way and a modern airport. There is still value in parts of Geelong and Ballarat although it is a little difficult for investors who are seeking new builds.
Investors looking to purchase new may have a long wait as most builders are extremely busy trying to meet HomeBuilder contracts and many are struggling to obtain materials. “Even if you can get the land, trying to find a builder is next to impossible,” he says.
Previously the Sunshine Coast would have been on Graham’s radar as a good investment location, but he says significant increases in real estate demand and prices have made it much harder to find value there, especially for investors. Tim says he typically seeks properties with a rental yield of about 6%. “As a general rule of thumb, you’re going to find that higher yield in the smaller capital cities and in good regional centres.”
Adelaide is providing good rental yields relative to the bigger cities and regional markets like Ballarat and Bendigo are still performing well.
Where is the right investment for you?
Well, this is where we come into the picture!
When our team recommended Geelong back in 2015 as an area full of potential, we were able to invite investors to take their chances on the great value real estate available in the region. Property values in Geelong have been seen tremendous growth since then!
The challenge is to find the right property to buy, and how to buy it at the best rate, and that’s what the Reventon team specialises in. With our team of property and finance experts, you are guaranteed a well-researched report on the target areas that include industry growth and job opportunities. Our property advisors go through market trends, reports on future investments in infrastructure, population forecasts and local developments in an area to provide you with expert advice on where exactly to buy your next investment property.