How To Avoid Buying In The Wrong Location.
We spend most of our time talking about finding the right property, but what about the steps you can take the avoid buying the wrong property? Buying in the wrong location can set you back in a big way. Over the years, we've seen many people make the mistake and get tricked into buying into strange areas. These ill-informed purchases, more often than not, are the result of a compelling story attached to it. We're a firm believer in letting data to the talking and let emotion take a back seat. There are many reasons we've seen relatively switched on investors make poor real estate buying decisions. In most cases, however, the reason comes down to skilled property "spruiker" that targets investors who, for one reason or another, are too busy to do the correct level of due diligence. In most cases it's not until a proper level of due diligence is undertaken that particular properties become a poor investment. We've found that once we go out and visit these specific sites, the initial appeal conveyed by the salesman quickly begins to unravel. In most occasions, these supposed "fantastic locations" can be: Flood proneFeature eyesores like power lines or substationsBe close to major road noiseHave large industrial zones nearbyHave high rental vacancy rates In years past, we've seen many locations touted as the next "booming market." These areas usually go hand in hand with vacancy rates as high as 6-7%, meaning your rental yield will be in serious jeopardy (and any chances of significant capital gain). So, how do we help find out clients property in the RIGHT location? The answer is surprisingly simple. To begin with, we look for high demand markets with vacancy rates under the 2% mark. From there, we take a look at a diverse range of key market indicators to give us an insight into the overall economic health of the particular region we're targeting. Another good sign is finding areas with a high percentage of "owner-occupiers." In our time, we've seen plenty of large-scale developments where it looks like nearly 80% of the people living there are renters, this is never a good sign. At Logica Property, we go above and beyond to understand the ins and outs of every location we put forward to our clients. We do the due diligence to understand all the unique factors that a particular location exhibits. We listen for road noise, examine the community, meet the people and most importantly, put ourselves in the shoes of potential tenants in the area to get insights into the areas long-term investment prospects.