From Editor: This is a guest post from Sachin
You’re thinking of buying a property but not sure where to look. Here’s a guide to finding the best real estate hot spots.
You’re in the market for a solid property investment but are unsure about which area to buy into. It’s always difficult to keep tabs on the changing property landscape so here are some tips on how to determine the real estate hot spots.
Tip 1 – Know How To Read The Trends
Luckily with the internet there’s more information on property sales and trends than ever before. Even financial sections of newspapers carry detailed breakdowns of property hotspots and which suburbs are performing well and which are struggling. But be careful how you analyse the data. One tip is to look at how the suburb has performed not just over the last year but the last ten years. This will give you a much better indication of whether it’s truly on the rise or if this is just a sudden spike or an abnormality.
If it’s been steadily climbing over ten years then you’re probably pretty safe to assume it’s a solid bet. When looking at the overall property sales, always evaluate the mean – in other words the rounded out sales figure. Also be careful to watch that the area hasn’t reached its sales peak and is now about to hit a slide.
Tip 2 – Research The Local Area
Sometimes investment property prices can be affected by all kinds of external factors. For instance, are there big development plans for that suburb or area? A good place to start is the local council website. If a park or reserve or cultural attraction is planned, this will usually affect local prices in a positive way. But if the council is planning on building housing commission apartment blocks or allowing developers to build an industrial plant, this could well affect property prices adversely. All development and council plans have to be publicly announced a long time before they happen. So you’ll find all these answers on council websites. If a hospital or science research facility is about to be built this will create hundreds of jobs and will mean that many more people will now want to move to the area. Also if an area is about to have major new infrastructure added to it (such as a train station or light rail) this will also make it desirable to live in. These are all long term factors that will lead to the suburb appreciating in value.
Tip 3 – Environmental Assets
Some areas will have their own natural assets. For instance coastal regions will have the ocean; some suburbs may have superb bushland; others may have lakes or rivers. These kind of environmental features will always add value to any area and consequently ensure that it will remain an attractive place to buy property.
Tip 4 – The Next Growth Areas
Don’t just look at where the current hot spots are: look at the suburbs next to them. These will quite likely be the next areas to take off. So if a suburb 10ks from the CBD is performing extremely well then it’s probably wise to look at the next suburbs just beyond them. As the hot suburbs reach a very high ceiling then consumers will start moving out slightly further. Economists refer to this phenomenon as a spreading cloud where the hot areas slowly move out in an even circle. So, if you can detect this trend then you can buy into the next hot spot before anyone else.
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