Whether it is possible to have strong capital growth and high rental yield on a property is hotly debated in investment circles. It is possible to achieve this. It’s through thorough, fact-based research and careful targeting of new investment locations. There are around 8,800 suburbs in Australia.
The use of market leading, independent research including RESIDEX™, ABS and the Real Estate Institute of Australia, matched with proven methodologies to find the next hot spots is the secret.
The property selection process needs to be tested and refined over a long period of time to prove its consistency and 20 years is a good period of time to determine consistency of success. Many of these emerging growth suburbs can be identified and investigated and need to be backed by infrastructure, amenities and jobs, near major cities and with stable population growth.
5 criteria for property selection
There are five selection criteria that achieve strong capital growth and a reliable rental return.
Major cities are a smart investment because of some key characteristics: stable population growth, accessibility to employment, amenities and transport.
Identify suburbs in major cities with forecast growth over 5% per annum. Using RESIDEX™ appears the most accurate provider for predictive growth forecasts in the industry. Then an in-depth area analysis and underlying fundamentals of demand drivers need to be done
Median priced property makes good sense for investors. An affordable rental property has broad market appeal to tenants and when it comes time to sell, you’ll have a price point attractive to buyers too.
Land appreciates, while buildings depreciate. Historical housing data shows house values increase at a faster rate than units, which is why the property value should have a significant land value component versus the building value. This is not the size of the land as some properties have very small land sizes but rather the value of the land as a component of the property value and the building cost.
Enjoy tax benefits on new or near new properties. A new home has many advantages over purchasing an old one: higher depreciation claims, higher rent and lower maintenance costs. A new house & land package can save around 60% on stamp duty because it is paid on the land component only.
DPN is an award-winning, professionally certified Property and Financial Services Consultancy. Since 1996, DPN has helped thousands of Australians build wealth through property.
DPN provides a successful property investment planning service, access to quality, high yield project homes, property management and an insurance and estate planning referral service.
Operating across Australia and Asia, with offices in Sydney, Melbourne, Brisbane, Singapore and Hong Kong.
Stay tuned for DPN’s latest research report, Why Invest in Macarthur. Click here to save the report date
Aspiring investors will benefit from DPN’s thorough, strategic approach to successful property investment. Read on for more about our unique research methodology and unbiased approach.
Some of Chan & Naylor’s clients have considered the DPN solution.
DPN are a seasoned team of property investment professionals with extensive experience helping Australians become financially independent.
Each month we will provide fresh content, including: our “Why Invest” region profiles from our research team, stories from our customers and exclusive market commentary.
DPN’s dedicated Property Research Team monitors the market to identify emerging growth areas.
For more information about DPN visit dpn.com.au.