Hot Spots for property investors:
What do investors look for when looking for Hot Spots?
Cash in the pocket:
Rent, for investors is a very important consideration. It is usually one of the most important factors when determining a Cash Property Hot Spot. Positively geared properties provide a regular and reliable investment return. This is when income from the rent exceeds all costs related to the expense of the property. The positively geared property pays for itself. You do not have to contribute anything yourself. Rent can be further increased by making improvements, renovations, increasing number of persons living there. This can be done by adding additional living space like a granny flat.
Rent in capital cities:
Judging rental demand is tricky, particularly when demand rides on the back of industry. Therefor it is important to consider the more constant demand in capital cities. People choose to rent in the capital city for different reasons. There are a large number of overseas permanent immigrants that choose to rent in inner suburbs, growth areas. Often making use of a short rental period, until such time as they secure an owner occupied for them. The other group of renters are the younger renters who are becoming independent and starting off for themselves. Their preference is to rent in high and medium areas, choosing areas which provide them the convenience of lifestyle and location. These areas soon become hot spots.
Rent outside capital cities:
This market can be unpredictable. These hot spots can be driven by the desire for country lifestyle, tertiary education in country university towns or holidaymakers. Whilst this type of renter is less in demand, there have been instances of late that have created the demand. For example the last mining boom created an increase for investors to making good returns.
How to pick Hot Spots with rental demand:
Most demand areas are predicted based on population growth, which is ratified by the Census of Population and Housing, which is done every 5 years. However this type of information should not be relied upon solely for selecting areas of Growth. Brisbane continues to reap the benefit from infrastructure development. Read here for more details.