Where to Buy an Investment Property

Here is an extract from an article from Anneli Knight form SMH on where to purchase an investment property. It is an approach that for many first time property investors I agree with.

“Buy where there is a thriving infrastructure. Do research on government websites and see where government is allocating funds for infrastructure.

“If it’s in a capital city make sure there is already good infrastructure, established roads and established
suburbs. I’m cautious of new suburbs because they take 10 to 15 years to level out,” Michael says.

“These are the things that you should try and look at when picking a town. Try and stay away from areas that are linked directly to one source of employment - such as mining or the army - because market growth is fluctuating on indicators that are out of your control. What goes up really quickly tends to come down just as fast."

I like this advice. Any first time property investor should be able to find a good property at a reasonable price in an established suburb in any city throughout Australia.

If you are looking in a major city, look for a suburb with a median house price below the median house price of the city. These areas will generally be classified as "low socioeconomic" and will often be overlooked by many first time investors. But, some of these areas are worth serious consideration. If you know the city well you will find them fairly easily.

And remember, take your time, get the right tax advice from a professional tax adviser - not a mortgage broker or real estate agent.

Copyright 2014. My Tax Zone.