Knowing the best property to invest in is like buying a lottery ticket – when the situations are just right you can be sitting on a winner. I have spent the last two decades elbow-deep in data and legislation so that I can provide my clients with the best investment advice for their property portfolios. Over this time, I have learnt that there are certain factors that contribute to the best type of property to invest in, and which ones might not be worth a second look.
Follow Your Emotion
Where people choose to live is largely driven by the emotions that they feel, which is why I make sure that any property I am looking at for myself or a client ticks specific boxes. These properties must be close to a desired school zone, have local amenities and be easily accessible to places where there are good employment opportunities. When I find a property that fits these categories, I know it will be a desired one. It also means that I will always be able to rent the investment out, and over time the capital in that asset will continually grow due to that desirability.
Look for Limited Availability
Another good indicator of a great location for an investment property is somewhere that is currently under development and will have a restricted number of buildings being constructed. What I mean by this is that I look for locations that, for some reason, have a restricted capability for construction, such as an area that is limited geographically. Areas that are located between a river or a mountain range, for example, or better yet if you have an area that is restricted by a mountain range and has ocean frontage of some sort. These development areas will mean that at some point new homes will unable to be built, thus restricting the availability for people to build more properties. When this is combined with a desirable location, the investment over time in this asset will increase exponentially.
The Three Property Types to Avoid
Knowing the right type of property to invest in is another crucial factor in ensuring that you put your money in the right place. I make a point of never investing in apartments, inner-city buildings or townhouses. The best type of property that will ensure you have a profitable asset is a three-to-four bedroom home on a block of land. These properties will return the highest amount of capital when you sell your asset, as they are always in high-demand in Australia.
Getting into the property market is a wise approach to ensure you have wealth over your working life and into retirement. Knowing the right type of property to invest in will ensure the odds of you getting the maximum return on your money is much more straightforward than buying a lottery ticket.