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Christmas shopping for investment

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There’s been a lot of investment activity in the Australian property market this year, and while I recommend investing in markets close to home or work due to familiarity and proximity, there are many aspiring investors considering regional locations these days because they’re so much more affordable than our major cities. Cheaper housing also means less stamp duty, and the rental returns in regional areas can be even stronger than in some city markets.

So if you want to buy regional, why not take advantage of the Christmas period and spend your holidays in your favoured prospective investment market? Many agencies particularly in popular coastal locations remain open during the Christmas vacation period for this exact reason, so you’ll be able to inspect several properties while you’re there.

Spending time in the regional area you’re considering for investment is a crucial part of your research. You need to develop some knowledge and driving around the suburbs and walking down the main street will tell you a lot. Here are a few other ideas on how to learn more about the area while you’re in town.

  • Talk to local residents. They’re probably well-versed in the joys and challenges of living in the suburb and have no reason to gild the lily.
  • Talk to real estate agents or buyers’ agents. Find out who the best agents are and give them a call. Then call their property managers to find out average rental values and vacancy rates.
  • Local councils are also useful when researching a suburb. They can tell you about any new infrastructure being planned or any major issues in the area.
  • Pop into a couple of local shops and talk to the business owners. Find out whether there’s a good local economy in town. Make sure you don’t buy in a town that relies solely on one industry.
  • Check out the transport. Is it easy for residents to get to the town centre by car or public transport? Jump on the bus and see how long it takes compared to what it says on the timetable!
  • Walk down the main street and soak up the atmosphere. Look for bustling cafes and shops, as well as major infrastructure like a Coles or Woolworths supermarket.
  • Drive around the streets and check out the architecture and block sizes.
  • Consider the lifestyle. You always want to buy in an area with desirable amenities such as a café culture, beaches and recreational facilities. If the area offers a great lifestyle, people will want to live there and that directly helps drive up property prices over the long term.

It’s a great time to buy in many regional locations, with a number of our own regional offices reporting growing buyer activity as vendors become more realistic and buyers realise that there are some great buying opportunities. Some examples in NSW include Newcastle/Hunter, Port Macquarie, Wollongong and Byron Bay.  Rental demand, yields and capital growth prospects in these areas are excellent. In QLD, you can’t go past the Gold Coast for value right now. That market will take a while to fully recover, but if you’re in it for the long term, you can expect some exceptional capital gains in blue ribbon suburbs such as Burleigh Waters, Sorrento, Broadbeach Waters, Paradise Waters, Burleigh Heads and Miami.

Just one proviso on all of this – while you’re out there doing all this research, don’t forget to enjoy your holidays too!

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Published: Tuesday, December 20, 2011

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