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How to pick a winning property investment: 7 points to consider before investing in Real Estate

7 Points to Consider Before Investing in Real Estate

So it’s your first time to dive into property investing. You are both cautious since you will be spending a big amount of money that costs you your lifetime of savings and salary and excited as well because you are looking forward to the return on your investment in the years to come. This mixed emotion is pretty normal, as risk and return are both part of any investing decisions. However, with the help of investment consultants such as Investors Advisors Australia, you will be guided along in your property investing journey, that would mean we are able to calculate risk we are willing to take, as well as leverage on the information, learning and experiences of these consulting firms to our advantage.

However, on the personal side, we need to understand how the property market works, because at the end of the day, you are the one who will decide on which investment to take and consider.

So now, how do we know that a certain property is a good property to invest in? The key to a having a great investment is all about knowing which markets are about to rise in value, and I am talking about LOCATION. We need to know which locations have a potential to grow so we could get in and position yourself early before the wave rises. And once you are already on the wave, all you have to do is ride on it and wait for the proper timing when you can maximize the return of your investment.

Here are the 7 signs in the market that gives us a hint that a certain urban centers and suburbs are emerging and that their value is about to soar:

  1. Demand is high than supply – the law of demand and supply is very basic and this dictates the market’s action to price. If demand in a particular market surpasses that of supply, any available inventory in the market will be snapped up quickly. This would mean that the average a property stays on the market is short and is going down. There are plenty of factors that drive the demand in market, and one of this is the shifting demographics. An exploding population means a higher instances of people wanting to live and work in the city and on its fringes, thus increasing the demand for properties.
  2. Fewer available properties – this is the opposite of having a high demand, where supply of properties dwindle in a short period of time. It means there is less stock on the market and that real estate developers are not building and developing projects at a rate of the demand. Any available inventory in the market will easily be snapped up.
  3. Falling Vacancy Rates – Since there is high demand due to shifting demographics, some would prefer to rent than to buy due to availability of properties. If the vacancy rate is dropping, this would mean that there are fewer tenants in the market than available rental properties, and this would result in rental price increase as some landlords or investors seize the opportunity for higher returns.
  4. Growing Rental Yield – this is the result of point #3. Rental price increases due to limited supply. And as the demand increases, the popularity of a certain location also increases, thus increasing the influx of people moving into that location. Investors then would follow since they will be attracted by higher rental yield, thus increasing market activity.
  5. Lesser discounts and promos – Since there is great competition among developers wanting to have a pie in the supply, vendors will eventually stop giving discounts to lure buyers. Demand is enough to drive the properties at the market.
  6. Rise in Auctions – you can notice also that aside from real estate developers, home owners also would want to sell their properties through auction. Auction have a unique potential to push a selling price even higher. A rise in auction and auction clearance rates in a particular location could be a sign of surging market.
  7. Plenty of online interest – many people search for properties online, and the demand generated by online property portals is one of many indicators that a certain urban center or suburb is attractive to the population – both investors and buyers.

There are plenty of tell-tale signs in the market to tell us that a certain location is an investment-worthy. It is just a matter of keen observation and be updated on what is happening in your locality.

Investors Advisors Australia has information on what’s the best urban center and suburbs in Australia that are performing well on the real estate market and are perfect for investment. Also, you may want to join in one of our free investing forums to arm yourself with the most current information about real estate in your city. Contact Us now for details.

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