Micro-location of a Property Just As Significant
Investors love the ring of the term Capital Growth; the way the term melts in their mouth. Having said this, capital growth is not always there for the taking. Achieving it needs a few hard measures, a lot of Due Diligence and a disciplined, investment-oriented mindset. It goes without saying that you have to choose your property in right suburbs but is it all you need to do? Let us find out.
Location within the suburb
Just as critical as the right selection of suburb is the need to choose the right location within the suburb. Put in other words, micro-location is just as significant as the macro-location. Investor portfolios have been hit hard in the past by wrong selection of micro-locations despite having gazes sternly fixed at the most coveted suburbs. Why does it happen? Why do micro-locations go wrong…so utterly wrong at times?
Two sides of the same block can tell different stories
There can be a multitude of reasons for this. I remember travelling to this place where they said, “the block on the left is considered low-risk money parking space by bankers and the block on the right is considered high-risk (ready to default) debt venue”. In a similar vein, it might be that two sides of a block present different stats for capital growth. One may fall among the most desirable zones of strategic investment while other may languish in terms of capital growth history.
Sometimes, it is because of the visual impression an area gives- what is its dominant theme? Is it a congested area, replete with noise and traffic pollution? Is it too close to the best-to-evade areas like petrol stations, cemeteries and industrial units?
Capital growth calculations
I know you might argue, and with evidence, that the poor location of a property gives it a lower sticker and in terms of ‘real’ value inflation, it might present solid grounds for capital growth, too (for instance, a great neighbourhood and a not-so-great one might see 15% appreciation in their house values, despite inordinately different base prices). I beg to differ.
I have found with experience that the same debilities which make a block or a neighbourhood or any micro-location less desirable may become a permanent blob on its face, thus dampening any chances of capital growth.
Ugly can turn beautiful
Yes, there are definitely contrary cases where the aesthetically ugly aspect is brought down and replaced by something very beautiful- take the instance of a mall taking the place of a cramped housing belt. In this case, the place may witness a unique pace of gentrification, yielding very high capital growth.
At large, a location within a suburb is considered a good investment when it is near to modern day amenities and aesthetically pleasant areas. You may go horribly wrong despite doing your homework diligently. There is history of capital growth to be considered. Among other things, demographic shifts, speed of gentrification, and local council initiatives merit attention.
A buyer’s agent who can deftly understand the nitty-gritty of property investment can go a long way in selecting the right location within the location for you.
If you are stressed about making the right selection in this regard, feel free to give me a call here.