Investing in real estate is a popular approach to wealth creation in Australia — the Reserve Bank of Australia’s 2.5 percent official cash rate has resulted in affordable investment and home loans for property punters across the country.
Choosing to invest in property is a big step, and while it shouldn’t be taken lightly, there’s plenty of potential for favourable results. Of course, this must be underpinned by solid research and an understanding of which areas are primed for capital growth and offer strong rental yields.
Think about distance
The suburb of Wynnum, located in east Brisbane, has been named one of the nation’s best rental suburbs for its strong rental yields and capital growth, according to a report from Onthehouse.com.au.
“Wynnum is a strong growth market for investors looking to expand their property portfolio, located just 16km to the Brisbane CBD, 20 minutes to the domestic and international airport and less than an hour to the surf beaches of the Gold Coast,” explained David Green, Principal of Harcourts Green Living.
Location is key when choosing where to invest. Part of Wynnum’s success is likely tied up with its proximity to Brisbane, while still being comfortably close to the Gold Coast’s best beaches.
Investors looking to attract tenants will want to consider location carefully. For instance, properties that cater to young professionals will be located in the inner city or will be a bit further out, but have reliable transport connections. For families, proximity to quality schools will be a key consideration.
Think about amenities
Homeowners may be convinced their own neighbourhood is the best place to live.
But it may be a better bet to consider what tenants want — and what they can afford. Property that’s well-insulated and in areas with plenty of local amenities nearby are a safe bet.
It’s worth observing which suburbs and local government areas are primed for future development. For instance, Sydney’s west will see the construction of the Inner West Light Rail Extension, a 5.6km rail extension opening up transport opportunities for more Sydneysiders, as well as a number of other projects. This is because its growing population is putting pressure on the local infrastructure, necessitating future development.
Areas that are in the early stages of infrastructure development could be a smart pick for investors, who may be able to pick up rental properties for a favourable price. Whether it’s for a SMSF investment or otherwise, those looking to build wealth may wish to seriously consider real estate ownership.