Your mate gives you a hot property tip. They’ve heard the suburb is taking off. The numbers look good. They claim it’s a no-brainer.
But how do you know?
Do you:
A. Trust your mate. They know their stuff.
B. Ask a family member, who may bring their own beliefs about money, investing and building wealth into the conversation.
C. Check the fundamentals for yourself.
We vote C. Because a hot tip can point you towards an opportunity. It can’t tell you whether that opportunity actually stacks up.
Before you invest, there are four boxes worth ticking.
1. Do people want to live there?
Start with demand.
What’s bringing people into the area? Look at population growth, employment, transport, schools, healthcare, shopping and infrastructure. These are the things that make somewhere practical and appealing to live.
But don’t get swept up by a new train station, hospital or shopping precinct. Yes, these things may show a blossoming community – but you want more than one factor to make it a good idea.
Ask yourself: Do people want to live there now? Are there practical reasons they’d continue to?
2. Are there enough homes to go around?
Lots of people wanting to live somewhere is only half the picture. You also need to understand how many homes are available to meet that demand.
Think of it like concert tickets. If 10,000 people want tickets and there are 20,000 available, there’s plenty to go around. If 20,000 want tickets and there’s only 10,000, suddenly those tickets have greater demand. Property works on a similar principle.
Look at how many homes are available now and how many more are being built. If lots of new properties are coming onto the market, people have more choice. If demand is growing but there aren’t many homes available, that creates a very different investment picture.
3. Will renters want this property?
A location can tick plenty of boxes, but you’re not investing in the suburb alone. You’re buying a home that someone needs to want to live in.
- Think about the households moving into the area.
- Does the home suit them?
- Is it close to work, schools, transport, medical support and everyday amenities?
- What are comparable homes renting for?
- And how much competition is there for similar properties?
The location might get someone interested.
The home itself still needs to make sense for the people who could live in it.
4. Do the numbers stack up for you?
A promising property still needs to work within your financial position.
- What are you paying?
- What could the home reasonably rent for?
- What will your ongoing expenses be?
- How does it fit with your borrowing capacity and broader wealth-building plans?
Professional property research considers multiple factors together, from housing demand and availability through to household growth, income, affordability, interest rates and building costs.
A promising property means nothing if the numbers don’t make sense for you.
How Investor Assist puts these fundamentals to work
These four questions form part of a much bigger process.
The Investor Track is the system we use to guide you through your property investment journey, from understanding your position through to matching you with a builder-direct home and supporting you beyond handover.
One stage of that process is Match It.
This is where our team draws on research from Oxford Economics, Terralytics and government sources to narrow the field to locations where the fundamentals support the opportunity.
Then we look at the homes available through the ABN Group builder-direct model and how they fit your goals, borrowing position and circumstances.
Because there’s a big difference between someone telling you a property is a good investment and seeing the thinking behind why it could make sense for you.
And while no research can guarantee what a property market will do next, it can help you make the decision with far more information than a hot tip.
Equity sitting still? It could be your next deposit.
Book a Discovery Call and see how the Investor Track works.
This article contains general information only and doesn’t take into account your personal circumstances. It isn’t financial advice. Consider seeking independent professional advice before making an investment decision.
