How To Spot The Best Suburbs To Buy Investment Properties In?

One of the questions I get from Mortgage World Australia clients is ‘How do I find locations that are likely to have good investment property opportunities?’ The challenge we all face is that we are busy in our day-to-day lives. Studying the real estate market is a job for a professional.

I can whole-heartedly agree – the time it takes for me to stay across the lending options available takes up quite a lot of my time. It saves my clients time.

When we only look at a market from time to time – we are only likely to hear about the places that have been hot already and have used up their growth potential. But those locations often give us a clue about where to look next.

Many data points should be reviewed when determining where to buy an investment property. Things like time on the market, number of sales in the area, rental vacancy rates etc are important factors. One method of location selection is called ‘the ripple effect’ and it is commonly used to find the next ‘hot spot’.

The basic theory is – if you hear about a hot suburb in the mainstream press, assume that a lot of the gains have already been made there by investors. However because the area is hot and prices are high, you can expect a lot of buyers to decide to look at the next 2 suburbs out because they are nearby but haven’t seen their value shoot up (yet).

Then what you do is buy your investment property there and wait as the market follows the same trend. It’s quite a reliable pattern, however, there’s no guarantee that just because one location has shot up 20% the adjacent suburbs are going to shoot up the same amount.

I know we started this by acknowledging most investors are going to be time-poor. This means that we aren’t going to be able to spend hours and hours poring over maps and looking at which suburbs are hot.

Thankfully there is an online tool for this. https://www.corelogic.com.au/our-data/mapping-market if you go there you can use the 3-month and 12-month value change features to spot locations that are rising fast and then look for nearby locations that haven’t had any dramatic price changes.

Then you can shortlist potential suburbs to look for good investment opportunities. You need to do your due diligence but it certainly makes shortlisting properties to analyze much easier.

The second component to successfully investing is being able to get the finance together to do ‘the deal’ which is where Mortgage World Australia comes in. We can help you find finance for your investment property call 1300 661 211 or go to https://www.mortgageworldaustralia.com.au/contact-us/and we can help you determine what you can afford and get your investment loan approved.