podcast

The biggest risk of purchasing regional investments

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Rich Harvey, Managing Director, propertybuyer

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The question as to whether to invest in a city area, a metropolitan area or a regional area is an interesting one. Our investors have shown that you can do just as well in a regional area as in the CBD. The thing for metropolitan investors is there's a very wide pool of tenants and you also have a diversity of employment opportunities. The risk of investing in a regional area is that the main employment drivers could dry up at some stage.  So regional investors need to do an extra layer of homework to make sure that the key drivers for employment are going to stay in place. I wouldn't advise to buy in a one industry town.  Places like Mount Isa or another area where there's only one major employer in the town can be quite risky. So if you're buying in a regional area look at what are the drivers. Who are the employers? What's the rental demand like? And what's the history of that rental demand been like over a period of time? But just buying in a capital city is not a fool proof investment strategy. When you're buying in a capital city, you've got to do just as much research to find the areas and the pockets of value and find areas where there's high tenant demand for the future.

Listen to other instalments of The Smart Property Investment Show:
Episode 65: Real estate agents: what separates the good from the bad?
Episode 64: How this investor learned from a property blunder
Episode 63: Q&A session: the SPI team answers your questions
Episode 62: Property procrastination: the importance of finding help
Episode 61: The ins and outs of strata: what buyers should consider
Episode 60: The pros of using a buyer's agent: why this investor brought someone in
Episode 59: How to invest in property as a team: two investors share their secrets
Episode 58: When do you stop investing? The SPI Show answers more listener questions
Episode 57: Wealth creation through property: trends and themes to think about in 2017
Episode 56: The SPI Show accountant reveals all: How to pick your financial team
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