Buying a good development project can help you realize a positively geared property for your investment portfolio.
Here are some key factors you must consider in your analysis and due diligence.
The most significant factor in real estate purchase is location, and the closer the development is to the CBD, the better the odds of a good investment if the price is right.
Moreover, proximity to amenities such as transport, education, shopping, and recreation will drive demand, so ensure to check what is nearby.
Does the developer have a good standing, and are they proven?
A promising sign is if they have built successful projects previously in the nearby area. A little market research here will go a long way.
Some crucial suburb statistics to consider:
- Capital growth investment
- Infrastructure investment
- Income & demographics
- Population growth
Good population growth in the area will drive the demand for housing, which also drives up the rent.
Not all houses or units in the development will be of comparable value. Some will have a better view, facing north etc.
Though, this is not a cause of concern if they are priced accordingly. Sometimes, you may find all the best options have already been bought, and the remaining stock, which is not as nice, is almost for the same value.
Hence, it is good to decide ahead if you have done your due diligence and consider the construction project has good potential once finished. Even some projects may provide discounts for early buyers.
Competing Projects In The Area
A growing population will need more housing and drive-up prices. Nevertheless, project developers may swiftly move in and flood the property market with additional housing resulting in oversupply surpassing population growth.
And, as a result, property market prices falling, sometimes rapidly.
It is always advisable to recognize what is happening in the area, how many development projects there are currently and if they are any more planned projects shortly. It may guide you to decide on a better development than the one you are presently interested in.
There are many different approaches you can use to invest in real estate and create long term wealth. Our investment property specialists can help you identify the right one based on your circumstances.