Location Tops The Wish List Of Property Investors
Any client sitting with me for even 10 minutes will hear me spell out the magic word LOCATION at least once. Yes, I give paramount importance to the location of a property irrespective of whether my clients seek it as buyers or investors.
Having said this, I will be the first one to agree that the dynamics of location are quite different for the buying class and the investing class. Let me tell you why.
Meaning of good location for a buyer
For a buyer, strategic location is one where he can be close to the major transport routes, his own working place and the chief consumer destinations of the area.
Close to consumer hubs and other facilities
In addition, he may look for churches, hospitals and schools in the vicinity. Few buyers with an ambitious bent of mind may even seek health spas in close proximity. In short, easy accessibility of amenities and facilities is on top of their wish list.
Something is really brewing with the concept of walkable neighbourhoods today. Property buyers feel good if they are at a walking distance from the nearest cafe. In fact, rising cafe culture is one of the prime reasons for appreciation of urban properties.
Meaning of good location for an investor
Investors are a different breed though. They buy properties for a different purpose. It’s an investment tool for them. However, in a way, what the buyer seeks is also true for them. Even if they won’t live in the property they invest in, they would still want it to be close to major consumer hubs, schools, and transport routes. Why?
It’s simple. They invest in property to make profits and for this they have got to sell it on a later day to someone. Thus, it always helps to think like a buyer when pondering over the question of LOCATION.
High rental yields
In my opinion, property investors look for a lot many additional aspects too. Take the instance of rental yields. Investors seek houses and units that offer high rental yield so that it can safely offset their mortgage liabilities, hence generating positive cash flow.
My experience tells me that capital growth is also very high on their list. If an area is growing abundantly towards east, they will think twice before buying in the west even if such properties are selling cheaply.
Diverse growth factors
Property investors also look for varied factors of growth in a property location. Recession in the mining industry has taught them to be careful. Many investors I have spoken to tell me categorically about their fears in this regard. “How can I invest in a region where there is a single industry?” “What if the industry collapses, what will then fuel growth in the area?”
I have also seen them ruminating over body corporate structures, easement policies, alacrity of council approvals (is there a history of red-tape) and construction compliance issues in the area they plan to invest in.
After all, you don’t want to be an investor whose Subdivision bid is thwarted by council protocols, do you?