How do you unearth growth spots?
When you’re buying an investment property, it’s easy to get caught out by talk of hot spots and purchase in an area that has already peaked in price, meaning you don’t get the best possible returns on your money. By keeping the points below in mind, you can buy into a new home and feel much more comfortable about the price performance into the future.
One early indicator that a suburb is on the way to gentrification is more and more upmarket shops opening nearby. If a local vintage store is replaced by a boutique fashion store, or a notable local hairdressing salon decides to relocate to a new area, it can mean people with more money to spend are demanding new amenities in the area. New cafes will pop up around the corner, and you’ll see the median prices bump up as the suburb becomes more popular and appealing for buyers.
Follow the young crew
Often, people who have rented in one place for a long time will seek to buy a home in the same area when it comes time to purchase. There is a lot of comfort in the familiar, and this can be an indicator of where you should buy investment property down the line. If a neighbourhood is largely populated with people in their late 20s or early 30s of the young professional mould, it can suggest this will become a growth area as they become first home buyers in the same neighbourhood.
Don’t get chained down
Have you ever walked around a suburb, loved the look of it as an investment paradise and then run into a large international chain coffee or food store? It may be best to look elsewhere in this case. By the time these stores set up shop in an area, it is generally accepted as an established hotspot, and has run through a lot of the price growth it is likely to experience.