What Makes for a Desirable Property Location?
It is not hard to be besotted with the idea of buying in a fancy suburb. Television shows promote them and the word-of-mouth, intriguingly, is usually in their favour. However, it is significant to remember that prices in such suburbs have long since shot northwards and you won’t be buying any cheaper than at peak levels.
Positive cash flow, capital growth, among other things
When you buy at peak, there is a good chance you don’t care about capital growth. Your mind is fully devoted to creating a positive cash flow. But is positive gearing easy to attain in such cases? Let’s find out.
Rental yield and vacancy rate
For a property to bring home a decent amount of positive cash flow, it is important to have a nice rental rate going. So, before buying a property in these ah!-so-popular suburbs, have you managed to find out about the rental yields and vacancy rates.
Rental rate of the market
Of course, you cannot charge below the market rates because it would mean you will end up paying mortgage through your pocket. Asking exorbitant rate is not in either because it would mean you shoot through the roof of the local rental market and not many would like to be your tenant. So in more cases than not, you have to choose rental returns equivalent to what the market is offering. This is why it is important to figure out all that there is to be learnt about the rental yield and vacancy rates.
What is wrong with fancy suburbs?
Because such suddenly-ballooned suburbs do not stick to the intrinsic fundamentals of the property market economy, their price floats around the unsustainable zone. This makes a meltdown in prices an any-moment thing. When that happens, you, as an investor, may see yourself suffering from capital decline.
What is a desirable property location?
To me, the most desirable property locations are not the fancy suburbs which television shows go gaga about but those which are supported by multiple economies (not like the mining area property locations which fell in prices as soon as mining boom busted), offer the right kind of town planning initiatives and have schools, hospitals and lifestyle hubs in close proximity.
What do you want to see, before any thing else, in your property?