With the current rise in interest rates causing prices to settle across the country and rental vacancy rates being very low, now is an excellent time to invest in property in Australia.

As an investor, you can make a purchase anywhere in the country and have it taken care of by a responsible property manager who will find good tenants and help ensure the home retains its value.

While it is difficult to predict future property prices with 100 per cent accuracy, recent statistics can be used to gauge where growth areas are.

Take a look at what makes a good investment property and check out some of the country’s top-performing postcodes and locations.

What to look for in an investment property

There are a few criteria that will let you know you are choosing the right property:

• Well-built, newer property: A property built to high standards in recent years will always make a good investment.
A cheaply built home can lead to problems, while older properties tend to come with the need for constant, costly repairs.

• Quality postcode: It may take some research if you buy outside your area, but you should try to buy in an area where people want to live. Buy in a sought-after suburb and you will find better quality tenants and be able to generate a greater yield (i.e charge more in rent).

• A growth area: If you can, you should also find a postcode that has been performing well and is set to experience further growth. Your goal is to grow your investment, so an area where prices are rising and demand is high is favourable.

• Infrastructure: One other tip is to purchase in an up-and- coming area that is set to welcome rail lines, schools and other facilities. If you purchase in an established area, make
sure the home has good access to all these conveniences.

Where to invest in Australia

Where you invest is up to you — you may decide you would rather buy a place that’s close to home. However, there are exciting options to explore all over the country.

For example, according to a recent report in the Courier Mail co-authored with realestate.com, Queensland and South Australia are good destinations for property investors in Australia.

In terms of units, Queensland has been performing very well, with the top nineteen suburbs being in the Sunshine State.

The Queensland suburbs of Holloways Beach, Loganlea and Brendale have been the best performers for unit investments. For houses, Elizabeth South, SA, Riverview, QLD, and Hackham West, SA, take the top three spots in terms of growth percentage.

By state, the best performing Australian suburbs (based on recent growth figures) are:

• ACT: Wanniassa, Florey, and Holt

• NSW: Maitland, Tenambit (both in the Hunter Valley/Newcastle region), and Bilambil Heights

• QLD: Riverview, One Mile, and Innes Park

• SA: Elizabeth South, Hackham West, and O’Sullivan Beach

• TAS: Warrane, Ravenswood, and West Moonah

• VIC: Thomson, East Bendigo, and White Hills

• WA: Gwelup, Brabham, and Bennett Springs

While these suburbs showed excellent growth, there are a couple of other factors to keep in mind as an investor.

One is how percentage growth is relative to property price.
For example, 20 per cent growth on an $800,000 home will put the value at $960,000. The same growth for a $500,000 property will see it selling for $600,000. So you will have greater profits from less growth if you own a more valuable property.

The other factor is the ‘property clock’. Last year’s growth is worth reviewing but you need to ensure it continues when you are deciding where to invest in Australia. Do your research and speak to a real estate agent about a postcode’s potential for growth.

Finally, when you invest, you also need to take rental yield into account. If you plan to hold the property for the long term, having a tenant pay a higher percentage of the mortgage will minimise financial pressure.

Some suburbs have outstanding rental yield right now so ask for some figures from your real estate agent to help you choose where to invest.

Talk to a Professional

Even armed with this information, your best bet for finding the right investment property for you is to talk to an expert who is based where you are thinking of buying. An experienced agent can share up to the minute data so you know you are making a well-informed decision.

Keen to buy an investment property? Contact me today at teresa@teresaberger.com.au.