Property investors in Australia are faced with over 500 Local Government Areas and 15,000 suburbs, so knowing where to buy next is no mean feat. Vivienne Kelly speaks to professional investors to discover their strategies for finding the next hotspot before it catches the attention of other investors.
Property investors are bombarded with various distractions in the marketplace and are often sold on the idea that in order to succeed they need to think outside the box. But according to WBP Property Group CEO Greville Pabst, this is not the right approach when seeking your next investment location.
Mr Pabst says the search for a hotspot can often become confused by incentives, offers and short-term prospects.
“I think investors need to ask themselves if the property would still perform by itself without all those financial incentives, because they’re really just distractions in order to entice somebody, and it’s not what you should really be looking for,” he says. “Those things are being offered to entice you, but when you go to sell the property, is the next purchaser also going to be afforded those same financial incentives?”
Instead of looking for short-term gains, Mr Pabst says investors who are looking to get wealthy by buying property should understand that “capital growth is king”.
In order to find a location primed for capital growth, and that will thus act as your own personal hotspot location, “the property needs to have certain characteristics and be located within certain geographic fundamentals”, he says.
Investors should be looking for suburbs with a high notional land value, Mr Pabst explains – around $2,000 to $3,000 per square metre.
READ the full article in the latest issue of Smart Property Investment – ON SALE IN NEWSAGENTS NOW.