At the end of the day, the aim of buying an investment property is to make a solid financial return – whether that’s through rental income or capital growth. Capital growth is how much your property goes up in value over time.
To find out whether suburb you want to buy in has strong capital growth potential you can look at how the median sale price has tracked in recent years and whether it’s gone up.
How many days are properties staying on the market? Are they being snapped up quickly?
What’s the auction clearance rate in the suburb? What’s the vacancy rate (i.e. the percentage of rental properties that are currently vacant in the suburb)?
These are some of the key property market data or metrics you should analyse when researching an area.
Before buying an investment property, think about what it would be like to live in the suburb yourself. What’s the lifestyle appeal like? Is there entertainment nearby? Parks? Schools? If you wouldn’t want to live there, why would anyone else?
It’s also a good idea to find out whether any major infrastructure projects are planned or underway (think of new transport links and amenities). If the area is showing signs of gentrification, such as an influx of cafes and businesses or more property renovations, it’s often a good sign of capital growth to come.
These are just a couple of things to think about when you’re wanting to purchase an investment property but there are a lot more to consider! Talk to us to learn more.