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Where to buy investment property: High Vs Low growth areas.

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J&N | 14 Jan 2013, 01:33 PM Agree 0
We are looking to purchase an investment property. We are undecided as to choose an area that has currently high growth eg 50% V's chosing an area which currently has low growth at 2%. If I was to choose the high growth area, Im guessing it has reached its possible peak, whereas the current 2% growth area could grow potentially. The 2% area is coastal Sydney suburb. Any suggestions please?
  • Eos Property | 14 Jan 2013, 08:27 PM Agree 0
    Look beyond the short term stats. Major increases in median prices for an area can often be explained away through an anomaly of some form; limited sale numbers with a recent spike, large scale developments being sold creating a spike, coming off a flat period sooner than adjoining areas and so on.

    Take a peak at the longer term property statistics for the two suburbs in question, look at plans in both areas, seek out information from the two councils about plans for the area and base your decision on these factors rather than just a small sample statistic.

    When making your choice you will also need to consider the rent returns you will receive.

    The property wealth equation is about growth and rent returns and how each relate to your unique set of circumstances. Too much of one factor (growth/rent) will hold you up in the long term. Suggest you focus your attention on property with higher rent return and WITH the capacity to add value.

    Hope this helps.
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