Principles of Residential Property Investment
Our three key principles will help guide you when buying an investment property.
Keep reading to find out what they are!
Case study – Cheltenham
One of our staff members invested in a unit in Cheltenham, Victoria back in May 2016, built by Steller.
The property was completed in the third quarter of 2017 and was subsequently leased out after one inspection.
The unit was bought for $355,000 and was valued at $400k at settlement.
Similar off-the-plans are now selling in high $400k’s to $500k’s.
Current Appeal
The property is around 20k from Melbourne CBD, 5 minutes walk to the local train station and walking distance from Westfield Southland shopping centre.
Although it’s not that close to the city, it’s performed the better than other properties bought around the same time.
The local area has plenty of job opportunities which is another great benefit, which will help attract and keep quality tenants in the area.
“With more than 66,500 jobs in Kingston – including a thriving manufacturing hub, bustling retail areas and plenty of corporate offices – there are many opportunities to build your career right here”
[Source: Kingston Jobs].
Future Appeal
Suburban Rail Loop
In the future there are plans for a new rail link, the Suburban Rail Loop, running from Cheltenham, past Monash University and on to the Melbourne Tullamarine Airport.
This would enable passengers to travel from Cheltenham to the airport in 45 minutes and would be expected to take 200,000 vehicle trips off major roads by 2051 [Source: Victoria’s Big Build].
The project would also generate around 20,000 jobs during the construction of the rail link.
This will be great for the area and will likely contribute to higher demand for property in the future.
Green Space
In addition to this, the council has announced that it will be creating a new park for the Cheltenham Activity Centre.
The proposal includes:
- A path network
- Central lawn space
- An Outdoor Gym
- Tree Planting
- Outdoor Furniture such as picnic tables and benches
- Garden beds
This will be a great addition for the community as it will provide a place to relax, workout and enjoy the outdoor space.
“We’ll be working closely with the community in coming months to design a green oasis in the busy area,”
[Source: City of Kingston].
The Council noted that it is becoming harder to obtain areas for green space with rising property prices however, it has invested in strategic sites to cater for the growing population.
This is another great feature which will only make the area more attractive to people to live and work in.
It will be easier to sell the property in the future as well as attracting new tenants if needed.
Positive Returns
If you buy in a good area – it keeps getting better. Sometimes you don’t know when you purchase that there are going to be improved amenities.
Typically a developer will look at an area and look at the population to work out which areas are growing and where it may be logical to improve the infrastructure.
They will develop according to public demand within specific areas and plan their designs accordingly.
The combination of population growth and if it’s an area that people aspire to live in feeds off each other. This will help investors get the most from their investment.
Even if a property is far away from the city it may get an improvement in the future, so shouldn’t be discounted.
Why Was This Property Chosen?
As well as its modern contemporary design, this property is close to transport and a large shopping centre which makes it appealing to tenants.
The developer had a good track record, they were introduced to us by a channel and we know they have been building for 20 + years, all around the Bay’s precinct.
We were involved in the project early on, so we could see how the development was progressing and kept in touch with the developer.
With new off plans selling for $525,000 adjacent to the site, it is evident that this development provided excellent value.
Triple Bottom Line Principle
This property aligns with our triple bottom line principle:
- Population Growth
- Employment Opportunities
- Infrastructure Spending
Some of the benefits are unknown at the time of purchase, however as the amenities around it keep improving so will the value of the property.
Helping You Succeed
Location Property Group regularly inspects and keep in touch with developers.
As investors ourselves and we do have a strong background in finding the right product for investment and long-term growth for residential investment.
Our team manage this safely by getting strong tenants and buying a small supply as this ensures a good cash flow.
We purely look at the investment side when it comes to developments and only choose developments which meet our strict criteria in order to ensure our clients get the best outcome.
To find out how to invest ahead of the rest please contact Alan on alan@locationpg.com.au or 0418 894 338.
