Owner-occupiers make up a significant percentage of homebuyers and are therefore the biggest drivers of capital growth. More importantly, they’re even fussier than your typical investor because they use their hearts and emotions, and prioritise their family’s requirements. Investors on the other hand use calculators when buying.
But Why Does This Matter?
You must focus on purchasing what the owner-occupier demographic are searching for so that they could choose properties that appeal to that specific buying group. Any property could be considered investment stock. However, not all of them are investment grade and being able to determine the difference is a deal. In addition to this, however, investment grade properties must also have the following features.
Scarcity of the Location
This is immensely vital and involves purchasing properties that are near the city centre because there’s little land left there, the beach, has easy access to public transport, employment centres or the central business district itself. The dwelling likewise has to be reasonably scarce. Think about what sets a particular property apart from other similar to it or those in the same vicinity. Perhaps it’s the interior features, floor plan, garden, or high ceilings, etc.
Local or community amenities do matter— an excellent school system, cafes, shoppes, and parks among others. Put simply, if an individual feels a connection to the people and culture of a community, they’ll be more likely to pay a higher amount for it.
Be aware that plenty of housing stock, commonly high-rise and medium dwellings is currently being constructed and targeted to investors. Because of this, there’s the risk of excess supply, which means that growth would probably be slow and getting a tenant would be harder. Additionally, properties like these usually don’t have high owner-occupier appeal because of lack of scarcity.
The question you need to ask then is if the property’s being sold due to rental guarantees or tax advantages, advises an experienced property law firm in Townsville. They add that although depreciation and tax benefits are great, they shouldn’t be your only concern. All in all, your best bet when deciding among many different investment properties, is to stick with the older style, low-density dwellings or an already established home, in an easily accessible location. You could consider depreciation in the future via a strategic remodel, which in turn would result in tax benefits later on.