Why Investors Club rejects almost 90% of the properties research. Main things we look for in a property.
Location
The main factor to consider when selecting a property is which location will have the greatest potential for capital growth? We look for locations where there is an increasing population and the locations will remain popular in the future. If we get this right, you are almost guaranteed long-term growth. We avoid areas that are currently booming and based on a single industry or that may have a limited future. The reason for current demand can quickly vanish.
It is all about supply and demand and areas that are experiencing consistent and strong population growth are particularly appealing and usually outperform the general market. Some suburbs hold more investment promise than others.
Properties close to the inner city are generally highly desirable, display strong capital growth over the long term and have consistently outperformed the general market.
Recently, these properties have become even more attractive from an investment point of view following increasing fuel costs and inadequate levels of infrastructure (including public transport), typical of the fringe areas of major cities.
Industrial areas close to the centre of our major cities are prime locations for redevelopment into residential or mixed-use areas. As travel times and fuel costs increase, the popularity of such areas is assured. The value of inner-city land continues to increase and encourages industry to move and make way for
inner-city dwellers.
Property investment researchers favour property in inner-city areas as it ensures good infrastructure such as shops, public transport, schools, childcare, doctors and hospitals. Such areas also mean lots of jobs and people prefer the convenience of living close to work.
Property investment researchers target properties with a ‘wow factor' such as proximity to the city, parks, golf courses and water. Being close to a beach, river, or lake is highly desirable.
Direct waterfront and beachfront properties that are close to amenities are likely to outperform the general market. Waterfront and beachfront properties have typically experienced higher rates of growth and therefore, better overall returns.
Design and build quality
How well the property is built, and even more importantly how well it is designed, may seem simple concepts but properties with inadequate attention to internal design underperform their potential.
Poorly designed property can have a significant impact on how your investment will perform in the future-it must stand the test of time and remain popular in years to come. Examine in considerable detail the floor plan of the property, ensuring that spaces are functional and suitable for long-term residential use.
Pay attention to room sizes, natural light, ventilation, aspect, access to bathrooms and patio areas, direction of north, storage etc. Note the position of the property in relation to other areas of a multi-unit development like the pool, gym, traffic areas, bin enclosures etc. Quality fixtures and finishes are also important.
We no longer need as many large homes as we once required. Smaller and more compact properties allow more people to live closer to our city centres and other desirable locations.
Apartments and townhouses take into account changing demographics, lifestyle and household sizes and therefore, make great investments.
Design and build quality of your investment property is critical. Property investment researchers always scrutinise the design and build quality of properties, selecting for our stocklist only those with the highest standards.
Attractiveness to tenants
Location, design and quality factors boost the likelihood of attracting and retaining quality tenants. A property that has been well designed and soundly built will always outperform a lesser quality property in the same area. Rents will be higher and tenants will stay longer. This provides greater overall return on investment.
Properties close to major infrastructure such as a CBD, a university or hospital and locations within an easy walk to the beach also have great appeal. Community facilities such as swimming pools, barbecue areas and gyms are attractive to tenants. Lifestyle facilities encourage tenants to stay for longer
periods.
Scarcity of available land in sought-after locations means prices are much more likely to rise than fall-even in a downturn or tough times.
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