Many property investors feel most comfortable purchasing homes close to their own. They believe their local knowledge gives them an edge and love knowing their investment property is just a short drive away. However, property experts say buying only in nearby cities and suburbs can limit your money-making potential.
Rick Nieuwenhoven, the director of property investment firm Nieuvision, says first-time investors often fall into what he calls “the trap” of “backyard parochialism.” However, he says investors may make smarter investment decisions and ultimately more money if they expand their scope.
Purchasing a property outside the local area allows investors to think more objectively and take advantage of property hotspots.
Nieuwenhoven says the best returns are usually made in properties located within 15 kilometres of city centres. He also cautions against buying in areas that rely on just one industry, as the market could fail if this industry falters.
Terry Ryder, the founder of property investment site hotspotting.com.au, suggests investing in areas where there’s the prospect of capital growth and governments are spending money on infrastructure.
“Sydney went from a city spending nothing on infrastructure five years ago to a city spending billions,” he explained, adding that this infrastructure spending was a key driver of local property growth.
Hiring the right people can take away many of the worries associated with investing outside your local area. For example, building inspectors have more experience than investors in assessing properties and their potential problems, so you don’t even really need to view your property before buying it. A property manager can tend to your property, so you don’t need to be close enough to keep an eye on it.
Financial advice from Chase Edwards can also ease some of your worries. We have more than 15 years’ experience in the real estate industry and a comprehensive understanding of real estate markets throughout Australia. We also have connections throughout the industry to help you find the right investment property for your needs, not the one that is simply close by. Contact us on 1300 854 833 to learn how we can help you secure your next investment property.