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By Michael Knights, CEO of Horizon Property Alliance
It’s said you make your money in real estate when you buy, not when you sell – and I couldn’t agree more.
Buying property at the right time and lowest possible price means instant equity upside for the new owner.
By combining excellent negotiation skills with the ability to pick hot growth locations, your wealth can streak ahead.
Backing those areas primed for gains means you’ll be very pleased when it comes time to revalue or sell, but how do you spot the growth zones and make the most of the opportunities?
NEW ESTATE NETWORKS
Buying early in new residential developments will see you spoiled for choice with spectacular opportunities.
This is where being well networked comes to the fore. The ability for you or your representative to draw upon relationships with wholesale internal land agents can mean big dollars for you on the buy-in.
These agents often withhold the best stock from the public and present it to their most reliable ‘little black book’ buyers. These are the purchasers who make it easy for them to do their job.
If you want in on these stellar deals, it’s not what you know, but who you know.
KPI’S THAT SIGNPOST SUCCESS
Multi-stage master-planned communities are a gold mine, because there’s an easy way to track their success and ensure you’re on a winner.
Large estates will have a well-publicised timeline for establishment of services, infrastructure and facilities. If a project is remaining on track with all they promise, it’s an indication demand is on the rise.
Growth in numbers will feed the need for education and retail facilities. New schools are a great measure as is the progressive ramping up of smaller (and then larger) retail outlets.
It’s one of those self-fulfilling processes too, because growing facilities will attract more residents which will, in turn, drive demand for more facilities.
BIG, NEW INFRASTRUCTURE AND TOWN PLANNING
Outside of localised facilities, there are major projects that influence entire regions.
There are some great resources available for anyone wanting to see where community-changing infrastructure is set to drive growth.
One of my favourites is local councils. Log into the town planning section on their website and see what’s about to come up.
Also – follow major research company data by subscribing to their newsletters and monitoring their social posts.
Finally – there’s nothing like the on-the-ground experience of local agents to help keep you in the know.
STAGED PRICE GROWTH
As developers progressively release each new stage in a project, they will incrementally increase the price of land. This helps ensure values stay solid so early buyers can enjoy upside.
Why not take advantage and be one of those early-stage purchasers? If you do your due diligence and are convinced the development is a winner, consider riding the growth from Stage 1 or 2.
I will add this caveat, however – stay on top of market conditions.
Regardless of how progressively priced each stage is, when a particular market softens, no property is immune.
I warn buyers not to take long contract settlements in this instance either. If prices start to fall, you don’t want to be tied into the upper figure. Better yet, make sure you can settle, be prepared to on sell and get out with a profit or get your money back if the market is heading south.
There are always particular micro-locations within suburb where investments will outperform their neighbours and yield handsome rewards.
Always look for close proximity to major shopping, sporting and especially lifestyle facilities. Being close to where you like to rest, and play makes sense – and this sort of convenience build upon its self, translating into value rises.
The same applies for renters as much as owners. You don’t want a holding that’s in a cultural and entertainment wasteland, or you might have trouble securing a tenant.
The key is understanding your market’s demography and playing to their downtime demand.
JOBS = GROWTH
As employment opportunities arrive, so too do employees.
Seek investment locations where businesses are looking to set up or expand within proximity.
This is also where major transport infrastructure can help drive growth too. Bus routes and train line extensions help bring a location ‘closer’ to other hub by reducing the time and cost of travel. If you know of an area where it’s becoming easier to commute to and from employment opportunities, look and see what investment prospects are available.
One further tip – seek out areas that aren’t reliant on one major employment source. Diverse economies help reduce risk, because if one industry shuts up shop, there’s always another to help pick up the slack.
Growth zones enjoy an increase in population which usually results in a diverse mix of resident types who will all require something different from their homes.
If you notice an area is starting to establish new types of housing stock – whether it be duplex units, townhouses, multi-level apartments or even zero-lot-line builds, it could be a sign that buyers and tenants are demanding more choice.
Keep an eye on these locations, because you could be on a winner. Change – particular a rise in development density – is a signpost of a growing market that’s appealing to more and more residents.
Keeping in touch with local town planners is a great way to stay abreast of new developments.
A progressive rise in median prices, tightening vacancy rates and rising population numbers all bode well for growth zone spotting.
Here’s where local agents come in handy. Most don’t mind providing data to help you research their area.
We at Horizon are more than happy to give our customers access to sources such as RP Data, because a well-informed purchaser makes better decisions and becomes a happy client.
Staying up to date with locations on the grow can take some effort. Fortunately, by relying on your network of professional advisors and representative agent, you can remain ahead of the pack and buy property at a price level that ensure excellent prospects for future gains.
If you are open to discussing a property investment strategy the team at Horizon Property Alliance are always ready to meet with you at your convenience.