Property Investment Locations Must Exhibit Diverse Factors Of Growth
Even if you have a Don Bradman in your team, your overreliance on one single genius can hurt you. You will be better served by a team that is blessed with many smart talents (even if a couple of rungs below Bradman). Terry Ryder for the Property Observer writes how areas exhibiting diverse factors of growth should be your choice for property investment.
Despite top rental yields and respectable capital growth back then, those areas which were touched by the mining boom are not doing too well today. It is because they relied too heavily on the mining industry.
Diversity is the key for locations
Ryder contests that investment locations which have various drivers of growth, in his words “multiple economic elements in play”, are better placed to do well over a period of time. The idea is simple. Even if one prospect fails, there will always be many more industries to back it up. This way, your investment would be less likely to hit a rough patch.
Economies consisting of multiple industries work better
Ryder does not mince words while suggesting that diversity of a location is his top priority while selecting a property. He gives the example of Albury-Wodonga while contesting that economies that consist of multiple industries never face recession or trough period. Instead, they travel through waves.
Albury-Wodonga boasts of:
- Modern day facilities
- Well-managed transportation
- Consumer hubs
- Strategic location
- Money poured into infrastructure
- Presence of National enterprises
- Subtly active (but not overactive) developers
- Good education system, medical facilities and profit-churning industries
You can read the original article here.
So you can understand why the place is developing at a pace perhaps only lesser to Townsville. After all, so many different industries are at work here and they together create a chain effect.
Explaining the chain effect
Industries comprising of, but not limited to, tourism, defence, construction, agriculture, manufacturing and hospitality, push up need for transportation and infrastructure.
It gives a shot in the arm to national enterprises and developers and results in progress (consumer hubs, good medical and educational system are examples of progress).
Similarly, all these signals of growth that we talked about further boost the various industries and encourages them for even better performance.
To nail the point
If however, there was a team of ten duds and a Don Bradman, who would have brought about or sustained the “run rate” once Bradman fell. Properties with single growth motivator cannot answer this question too well, can they?
Next time you think of making an investment, check out for the drivers of growth in your property location.