An investor wants to know more than anything else that their investment will earn them a good return. They want to know the numbers will stack up; they want the most bang for their buck.
According to CoreLogic RP Data, the median house price across the eight capitals is $615,000. Median unit prices across the capitals is $520,000.
It’s no secret that $615,000 will buy a different property in Sydney than it will in Brisbane.
For an investor in larger markets that have experienced strong growth in recent years (yes, that’s you, Melbourne and Sydney), getting the most bang for their buck can be challenging.
Although both of these markets offer excellent capital growth potential, the larger values can limit the options for investor buyers as well as reduce the potential for strong yield.
That’s why buying interstate can be an excellent option for some buyers.
Take for example a property in Auchenflower, Queensland, purchased by State Manager, Stephen McGee.
Set in a boutique block of only eight, the top floor, three bedroom apartment is only two kilometres to the CBD. It’s also a two minute walk to Auchenflower train station, Toowong Park, and close to shopping and cafes.
The property was purchased in mid-2014 for $471,500 and is currently tenanted to $430 per week.
Stephen estimates that a buyer would need up to $510,000 to secure it now. Rented at the same amount, the rental yield would be around 4.38% – still an excellent return.
Prime buy for an investor: the top floor apartment 2kms from the Brisbane CBD, purchased by Stephen McGee
Or what about a property purchased in Brighton, South Australia, secured by SA State Manager, Adam Stone in August, 2016.
Set on a massive 864m2 with a huge 23 metre frontage, the property offers superb scope for developers to update and extend, or completely redevelop.
One of the biggest assets of the property is its location. Positioned close to shopping, Brighton train station, and Flinders University, the property is only 15kms into the CBD, and less than a 20 minute walk to the beach front.
The price for a property of this size and potential in such a superb location? $607,000. For a savvy developer this represents excellent value for money.
In larger markets such as Sydney or Melbourne this would be far, far more. If the property were located in Brighton, Victoria for example, it would easily reach three times that amount.
Investors in these larger markets can become despondent if their search for a quality investment takes a significant amount of time with no reward. But they shouldn’t get frustrated. An investor is investing for one reason: to create equity. Thankfully, it doesn’t matter where their asset is located.
Property in smaller markets like Brisbane and Adelaide should absolutely be on an investor’s radar. With more affordable prices for property much closer into the CBD or with easier access to desired natural amenities such beaches and coastline, these markets provide ample opportunity and excellent value.
Buying interstate does present a different set of challenges; it’s obviously a bit more difficult to physically view the property for one.
But investors don’t necessarily need to inspect the property. If the end game is about securing strong equity growth, investors should be engaging a property expert to search and purchase a property for them anyway.
Buyers should make sure that they are purchasing the best quality property available; they don’t need to physically inspect the property and can instead rely on the expertise of a Buyer Advocate. National Property Buyers is often engaged for this reason.
To speak to a property expert on how you can secure a quality investment, contact us.