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The announcement by the State Government in Western Australia to spend $500 million on upgrades to road system in the northern suburbs highlights the importance for investors to focus on new infrastructure developments during 2013.
Blogger: Rory O'Rourke, O’Rourke Realty Investments
The outer northern coastal suburbs of Burns Beach to Hestor Avenue which will be completed in four years.
Road infrastructure has played a key role on property values especially in outer Perth areas with major transport upgrades making them more accessible to the city centre.
For example, the extension of the Mitchell Freeway during the 1980s to Karrinyup Road, then Erindale Road and to Hepburn Avenue had a very positive impact on surrounding property values.
The extension of the Mitchell Freeway to Hestor Avenue will equally have a positive impact on property values in areas such as Mindarie, Clarkson, and Butler.
Other major new transport infrastructure planned for Perth that should boost property values moving forward include the proposed light rail Metropolitan Area Express (MAX).
The $1 billion MAX project should have a positive impact the properties which adjoin it route. MAX will run from the Balga TAFE campus south along Alexander Drive and Fitzgerald Street to the CBD and then divert west to the Queen Elizabeth II Medical Centre in Nedlands and east across the Causeway.
Overall, MAX should provide opportunities for astute property investors and property developers?in a same way as the construction of the Perth to Joondalup and Perth to Mandurah railway lines.
First time investors should consider buying a property during the 2013:?
* Begin your property portfolio by purchasing a well located property for less than $500,000. Buying a lower priced property will give you good experience while at same time not financially over committing yourself. You can start by buying a smaller property in a high capital growth suburb such as an older home unit located near the river or close to the beach.
* Consider the land content of the investment property rather than the structure of the home. It is important to remember that land appreciates in value and the buildings depreciate in value. A property which has a land content of more than 75% has a greater chance of appreciating at a higher rate than a property where most of the value of the property is in the building.
* The block size of the property is also important. The larger the block the greater the potential the property has for future subdivision which will significantly increase the value of the property. You should check with the local Council to ascertain any future changes to land zoning which might allow the opportunity for higher density homes.
* Consider buying a property where there is a broad range of property owners rather than just investors. For example, if the area has a significant number of owner occupied homes it means that the potential pool of people wanting to buy your investment property in the future will be much higher than a property that just appeals to investors.
* Always work towards a strategy of buying several investment properties rather than just one or two. Through owning several investment properties, you can create significant amounts of personal wealth. To achieve this outcome, put in place a long term strategy and stick to it.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.