We’re always talking about where to invest and why somewhere is a sound investment. Just to change things around, we thought we’d share the red flags to watch out for when looking for an investment property and some example areas that are waving those flags right now.
Sydney’s East, NSW – low rent yield. Currently sitting at 2.9% for houses as compared to Canberra at 4.5% and Brisbane at 4.4%. Yield on units is 3.3% compared to 5.8% in Belconnen, ACT and 5.5% in Sunshine Coast, QLD.
Haymarket, NSW – high vacancy rates (6.7%), low rental and buyer demand, high rise towers and low diversity of buyers which is likely to affect capital growth.
Kangaroo Point, QLD – too much supply which affects yield, vacancy rates and capital growth potential, high rise towers.
Logan, QLD – low demand, no gentrification, no plans for improvement to make the area more appealing to buyers or renters.
Maribyong, VIC – 5.2% vacancy rate, low diversity of buyers, low capital growth, high rise towers.
Docklands, VIC – 11.2% vacancy rate!
These figures are accurate as at end of April 2021, according to our researchers. They’re subject to change and just used as examples of why we don’t recommend investment in certain suburbs or regions.
So, on the flipside, what we look for is:
- low vacancy rates
- high demand
- limited supply
- low rise, boutique developments or house/townhouse and land packages
- capital growth potential through private and government investment.
The important thing to always remember is that the property you select must meet your investment strategy which may be to reduce tax, create wealth, diversify your investments, etc.
Please let me know if you’d like to find out more.