The four types of property investors should have on their radar
The properties that make the best investments vary year to year, sometimes even month to month. It all comes down to a balance of purchase price, capital growth rental yield and overall projected return on investment – and predicting those things can be tricky. So, we’ve sorted out the four best types of investment properties right now. So your hunt for an investment property can be easy.
1980s homes in inner city areas
The HIA Renovations Roundup Report identifies trends in the renovations market and over the next two years, houses between 30 and 35 years old will be coming onto the market in high volumes. HIA Senior Economist Shane Garrett said, “The really good news is that the number of houses in the key renovations age group will increase substantially over the next decade – a result of record volumes of detached house building during the late 1980s. Houses belonging to the ‘1980s Club’ will become increasingly ripe for renovations work over the coming years.” The good news is these types of properties are in inner-city suburbs that have great value. So, if you can afford the initial purchase and some renovation work, you can make a great profit from selling just five years later with a remodeled interior and updated exterior.
House and land packages in outer city hubs
The satellite cities within 30 and 40km of major CBDs are another investment hot spot. Extreme growth driven by increasing infrastructure, employment opportunities and idyllic lifestyles have made these areas a renters’ dream. Some of these cities, like Pimpama sitting between Brisbane and the Gold coast have experienced 350% population growth over the last decade! The best thing is due to the early stages of development, new housing stock is more affordable and more advantageous to investors than something old. Think better rental yields, depreciation and tax concessions and high forecasted median price growth. These properties should be relatively long-term investments to make the most of the capital growth.
Townhouses in the 10km CBD ring
These are a little bit more difficult to come by, but buying inside the 10kms CBD ring of any capital city is expensive, so buying a townhouse makes it a little cheaper and the good news is developers have cottoned on to this across the country, after the apartment boom, so there’s more townhouses in development right now than there has been in the last few decades. If you can identify a well-designed medium density property within 10km of the CBD, it’s going to be a good investment in the long term.
Duplexes in family oriented areas
And last, but certainly not least, the duplex. As Australia moves into a multigenerational home format, something that we seem to see most often at opposite ends of the demographic scale, duplexes are only going to increase in value. The flexibility to have either two tenants and two income streams or to have one multigenerational family living in the property makes this as attractive to renters as it does to the investor. Currently, banks aren’t valuing duplexes as builders and developers perceive they should so you might need to outlay a little more cash than expected to actually secure a mortgage, but if you have existing equity it shouldn’t be too much trouble.
There you have it – the four types of properties that should be on every E-Fishient investors radar! If you have any questions about them or would like to know more about the market, get in touch with us.