So, you want to be a property investor. You’ve realised the potential locked up in the home you already own and are thinking about leveraging that equity to build an investment property. But where should you be looking to open the best potential out there?
We’ve enlisted Invest by Metricon General Manager John Sheehan, who heads up this newly released investment product, to share his industry knowledge about how you navigate all the options involved in making the smartest investment choice.
What do I need to know about investing in property?
It’s often said that you need to disengage the heart and invest with your head only, but we don’t think that’s the whole story. Stepping up into the property investment game is a big deal, and you absolutely should enjoy the experience. You’ve earned it, after all.
“I think it’s good to point out that investing is still emotional,” says Invest by Metricon’s General Manager John Sheehan. “The emotional part is where you want to get to, that financial freedom. The actual house should be quite rational, but to say there’s no emotion involved, that’s just not how we work.”
It pays to look further afield
It is true to say that often the best investment property isn’t in your own backyard. “Why do people think that the best investment opportunity for them happens to be around the corner, just because they know and like the area?” John asks.
“It could be in a greenfield area that’s 100 kilometres away. You’re not going to live there. The emotional part is all the earning potential and the security that investment could give you.”
That doesn’t mean that you’re short-changing your potential renters, either, far from it. The best property investment is a win-win situation for both of you. Ideally, you’ll be buying in a fast-growing suburb that appeals to renters who value their space, have easy access to amenities, retail, schools, and doctors, and can still easily reach the CBD.
A fast-growing city like Melbourne offers an abundance of opportunity, John says. “All the fundamentals are there. The economy’s great, and so is the lifestyle. The same can be said for Queensland right now, with the property market booming there, particularly in satellite towns.”
Melbourne suburbs, including Berwick and Werribee, with Morwell and Mooroopna in regional Victoria, are currently great areas to consider.
Logan performed well in Queensland, and Bundaberg is picking up too. Andrews Farm, Davoren Park, Munno Para, and Salisbury Park have proven strong growth areas in South Australia in the first quarter of 2021. Wagga Wagga in NSW has seen growth too.
Corelogic.com.au is a handy site to research investment opportunities, with a wealth of in-depth reports for free or for minimal cost.
What do I need to look for?
You’ll need to do the legwork to ensure you get the best possible return on your investment. As John suggests, it’s all about location, location, location.
Tenants buy into a lifestyle, and that means they’re looking to rent in attractive areas with plenty of public space, parks, good schools, shopping strips and easy access to the city with public transport options or road connections. These priorities will also help you secure a reasonable price if you do sell later.
The great thing about Metricon’s home and land packages is that we’ve done a lot of the heavy lifting for you, locating significant growth areas that should hopefully provide strong rental yields too.
“There’s a general understanding, in the property market, that once you start to charge rents higher than about $600 a week, that’s where it starts to cut out,” John says. “So, let’s say if you own a $1.5 million, three-bedroom inner-city house, that will rent for around $600 a week. Yet you could buy a $600,000 house in an outer suburb that would also rent for $600.”
You can see the potential right there, John suggests. “For a $600,000 outlay, you can get a $600 a week return, as opposed to spending 1.5 million, more than double that amount. The chances of an inner-city suburb continuing to go up when it’s already at that $1.5 million mark, are limited. I prefer to build two houses to rent in an outer suburb that still has plenty of growth potential and spend $1.2 million to make $1200 a week.”
We recommend taking a look at realestate.com.au to research rental returns and vacancy rates. You can also scope out property prices to figure out the best areas with potential for property investors.
Still unsure about beginning your investment journey?
The good news is that you don’t need to be an expert. Invest by Metricon has your back.
We offer a tailor-made service that takes all the worries out of the building for investment process. We’ll help you purchase a home and land package in a prime growth area and handle everything from breaking ground right through to the finishing details. You’ll be left with a rental-ready investment good to go, without the headaches.
Make sure you seek financial advice
While we’ve tried to be as helpful as possible, this article should not be considered professional financial advice. It contains general information only, and you should seek out independent, professional advice on your personal situation before making any financial decisions.
If your financial adviser thinks an investment property is a good idea, based on your current financial situation, then talk to one of Invest by Metricon’s friendly experts today.
If you feel ready to start your property investment journey, learn more about Invest by Metricon today. Invest by Metricon offers an end-to-end process that allows you to obtain a rent-ready, premium home in one of Australia’s leading estates, simplifying your investment journey. With new build investment opportunities across Victoria and Queensland, you're sure to find something that suits your investment strategy, no matter where you live.
