Buying into an area as it's about to bloom can be a fantastic opportunity, but as the real estate market seemingly has a life of its own, it can be tricky to predict where the next hot spot will emerge. If you're looking to buy your first investment property or growing your portfolio keep an eye out for these tell-tale signs that indicate an area is about to take off.
Enter The Builders
From abandoned warehouses and neglected blocks to old homes in desperate need of a makeover, many areas that have seen a huge surge in popularity emerged out of a shabby past. Keep an eye out for construction in less desirable suburbs, be it the remodelling of industrial spaces, the creation of green areas, or locals tidying up their homes, as they are good indications both the council and locals are investing into their area.
New Kids On The Block
Oftentimes, young people are priced out of established markets, leaving them with no other choice than to set up home in a more reasonably priced area. And the same holds true for artistic types. The huge upside to having these demographics settle into an area is that bars, restaurants and other businesses are sure to follow. They also bring an upbeat, creative flair that sooner or later will ripple out across the suburb and, before you know it, the next hot spot in the market will have been revealed.
Going, Going, Gone!
A sure-fire way of finding out if an area is on the rise is to window shop at local real estate agents. Charles Tarbey, Chairman of Century 21 Australia, says: "When an area is about to take off, agents will be marketing themselves strongly. You will also see an abundance of properties advertised in their windows with SOLD stickers." Agents will also be able to share their knowledge of development plans, so it's worth taking the time to speak to them about recent market shifts and planned movements.
At Your Service
Buying into an area lacking in amenities can be a risky business, so a visit to the local council to enquire about plans for developing new infrastructure or improving what already exists is essential. Services such as a public transport network, schools, medical facilities, childcare, supermarkets and other retail stores are basic needs that can make or break a suburb. Without decent infrastructure in the area, a property is much less likely to gain in value, which will make re-sale all the more difficult.
The tricky part about investing in an up-and-coming suburb is finding the sweet spot in timing. Many areas will only appear on the radar once they have started to take off, meaning you may have missed the window of opportunity to land yourself a profitable investment. But buying too early may involve a long waiting game and leave you living in an area you would rather not be in. So, when is the optimal time to buy? "When there is an abundance of property on the market," says Mr Tarbey. "In a buyers' market, your ability to negotiate improves dramatically."
Some of the best performing suburbs to consider, according to the April 2020 property market update from Smartline, are Kotara, Islington, Charlestown, Waratah, Wallsend, Tighes Hill and Mayfield areas (all located within a 20 minute drive of the Newcastle CBD).
So, when you do find that perfect property, talk to a property manager first and obtain an unbiased rental appraisal through an independent agent (not the selling agent). Century 21 Newcastle has a wealth of experience in superior property management and are here to help. You can use our agency as a sounding board, discuss demand in the area you are purchasing, median rents and the type of tenant you would expect to lease the property.
If you'd like to know more, contact us today on casey@c21newcastle.com.au or 02 4928 7400. We're on hand to make your path towards investment property success as stress-free as possible.
Disclaimer: The opinions posted within this blog are those of the writer and do not necessarily reflect the views of CENTURY 21 Australia, others employed by CENTURY 21 Australia or the organisations with which the network is affiliated. The author takes full responsibility for his opinions and does not hold CENTURY 21 or any third party responsible for anything in the posted content. The author freely admits that his views may not be the same as those of his colleagues, or third parties associated with the CENTURY 21 Australia network. As everyone's financial situation and goals are different please talk your trusted financial adviser for tailored advised to your circumstances.