Location Strategy In Property Will Define Your Success
When it comes to being a successful property investor the one thing you’ll hear over and over again is that what you need to buy is the big ‘L’ – location, location, location!
The significance of location is simple – you can do what you want with your real estate, but you can never change the area it’s in. That’s why we need to be smart about where we invest.
Australia needs a new property every three minutes and 55 seconds in order to keep up with our rapidly growing population. Currently demand is outweighing supply across our markets.
On top of that, what is available is a lot of dysfunctional real estate. Developers are fighting tooth and nail to sway new investors to buy off the plan or take advantage of a house and land package.
The thing is, this real estate is rarely in a desirable location.
LET THE WEALTHY PEOPLE GUIDE YOU
If you remember a previous blog I wrote about the 4 X Growth Plan, you’ll know that gentrification is a huge driver for capital growth and looking out for it is a sure-fire way to know you’re investing in the right location.
As a refresher, gentrification is the process of economics going up in an area as more wealthier people flock to the neighbourhood. This creates growth as they bring with them new money, subsequently attracting more housing, business and infrastructure.
Wealthy people live where they want to live. They are willing to pay more for better locations that provide proximity, mobility and liveability. Don’t waste time checking where other blind investors are going. Follow the activity of owner-occupiers to know where the valuable areas are.
DETERMINE HOW BEHAVIOURS MAY CHANGE IN THE AREA
Continuing on from the process of gentrification is the process of behavioural growth. In the context of location, there are always trends or influences we can look out for that will determine how our property may be used differently.
For instance, I looked at a property in Perth that was coming to market in the inner ring of the city on a working marina. Now real estate like this isn’t the type that gets produced every three minutes and 55 seconds – in fact it likely only comes around every 20 years.
What’s even better is that by being on the marina, this property is going to create certain lifestyle behaviours that others can’t replicate. Considering how infrastructure has been growing along these waterways, soon enough you could be jumping on a ferry right out front of your house and cruising all the way into the city.
Locations that can create positive or desirable behaviours are worth their weight in gold. Keeping up to date with local council projects is a great way to know how they are planning to grow areas and foster certain behaviours.
KEEP YOUR LOCATION OPTIONS OPEN
A lot of quality real estate gets over-looked because investors have preconceived ideas about certain locations, but remember it’s not about buying property you want to live in personally.
Also don’t feel as though you should only be looking within your state. You don’t need to live nearby to invest in a property – management of your real estate should be done by a professional property manager anyway – you just need the right team of people that can help you access the data from these markets.
Talking with a property strategist and a buyer’s agent is a great way to open your mind to areas that you are not so familiar with. Their insights and research of property cycles will help you to narrow down your search to a handful of potential locations.
GET BACK TO THE BASICS
If you’re a newbie property investor or are simply looking to make better informed decisions with your portfolio, it can be worthwhile getting back to the basics.
Our free real estate industry nights take you through the golden rules of finding the right location to invest in. Our Positive Real Estate coaches know first-hand how to seek out growth opportunities and can help you to strengthen your strategy in order to successfully buy in that area.
Spaces are limited so be quick to register for the next seminar.
By Sam Saggers