How to pick a high growth property in Melbourne

In the push for higher density living, land components are shrinking on new developments and this means investors and savvy home owners must consider not just the property features that have been desirable in the past, but those that will generate high growth in the future.

Getting the formula right isn’t as simple as the traditional mantra of ‘Location, location, location.’ It’s true that location is absolutely critical but it’s just the first factor in finding and acquiring a high growth property. Buying in an established suburb with pleasant streetscapes and easy access to transport and quality schools is a sensible starting point. But once you’ve got the position right, you must get the price right. Despite the property’s fabulous location, if you pay the wrong price for it, your growth potential is already compromised. Due diligence is an important part of the purchasing equation that gives buyers a sense of comparable sales in the area.

Here are five factors buyers and investors must consider:

Land component

When buying, never lose sight of the fundamental principle of property: land appreciates, buildings depreciate. Many new, high density developments with smaller land components have significantly less growth potential than well-located older apartments in small blocks.

Period homes

Period homes will continue to grow in value and those that are close to transport and shops (but not on top of shopping centres and main roads) will be a safe bet.

Apartments with potential

Investors who are looking at apartments must keep an eye on both capital growth and tenancy characteristics. In terms of quality tenancy potential it’s generally a better choice to buy an apartment on the first floor which has off street parking, a balcony or outdoor space and a pleasant architectural facade.

North facing

Smaller land components means smaller gardens which will in turn add more significance to the issue of natural light inside homes and apartments. Make sure the property you buy faces north or west.

Long-term

Don’t forget that property is a long-term investment. Even if it’s your own home, five or preferably ten years should be your goal to make sure you recoup your transaction costs and get the most from your investment.

For up-to-the-minute advice on buying or selling in Melbourne call us on: (03) 9827 3355