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PPG_Blog_July_IMage 6July can be a busy time for property investors as they sort through end-of-financial-year deductions and paperwork. Around this time many investors are looking for opportunities and talking with their real estate agents about prospects in the market.

Quality advice starts with encouraging investors to do their research. This gives them the confidence to make an educated purchase.
When researching the market, investors should be mindful of the key characteristics of successful residential property investment.

The better investments are generally in places where there is consistent population growth – which, at the moment, is a Melbourne-wide phenomenon. Currently, vacancy rates are at an all time low, and have been for more than three years.

Tenants like convenience. The better investment properties tend to be those which are easy to maintain, have space for cars, access to main roads and public transport and are located close to shops, schools, tertiary institutions and other community infrastructure.

The ideal investment location is where demand for rental properties exceeds supply. In the current tight market this is almost everywhere, but it won’t always be the case. Do your homework to gain a long term view of local conditions. The Australian Bureau of Statistics has census results illustrating areas of high tenancy rates.

Ordinarily, a good measure of the supply of rental properties is the proportion that is vacant. Suburban or town vacancy rates are not always readily available, but there is no question that metropolitan vacancy rates are currently low at around 1.5 – 2.5 per cent. Another measure is the number of new housing developments and this information is available from the local council.

Look for properties that are affordable, generally at or around the median price, and which have reasonable prospects of good growth in values.

Historical median house price information for suburbs and major regional areas is available from Real Estate Institute of Victoria. This information is useful to discover patterns in values.

Choosing a property with redevelopment potential can also be worthwhile. An investment property that can be subdivided into smaller lots for home units will be popular with some developers and can bring long-term rewards.

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