Future Proofing Investment Properties in Uncertain Times: 3 Basic Principles

Whispers of national recessions, market crashes and popping property bubbles have been doing the rounds for decades. Yet, many property investors continue to thrive, despite both real and speculated economic ups and downs.

What is the secret to choosing a property that has growing value, as opposed to a dead end investment that never pays off?

1. Research the Area’s Future

If you don’t take the time to get an understanding of both the zoning and future planning of your potential investment area, you could miss out on some incredible opportunities.

Take, for example, the recent case of a property for sale in Brisbane. Two years ago, buyers were put off from purchasing this property because of its consistently noisy neighbour - a very active live music venue.

However, few potential investors bothered to investigate the future of the music venue. If they had done their homework, they would have known that the venue was under a 2-year lease that was not, under any circumstances, going to be renewed.

The lease is now up, and the music venue is set to be demolished and replaced with an apartment development. Meanwhile, the savvy buyer of the previously unwanted property nearby is now enjoying the financial benefits of owning land that is now in a highly desirable location.

The bottom line: Areas are constantly evolving, and when you invest in a property you’re investing not in the present vicinity, but in its future surroundings.

2. Renovate with an End Game

Television shows like The Block, Renovation Rumble and House Rules all emphasise the importance of wowing buyers with the latest in home technology, style and design.

In reality, however, there’s no prize for having an investment property with all the latest bells and whistles if those extra trimmings aren’t what the renters or buyers you target want.

When it comes to renovating, prioritise improvements that are suited to the type of people likely to move to your area. Don't buy a pool when retirees dominate your neighbourhood or install a fireplace when you're trying to sell to a young family.

The bottom line: Stay on top of the market by renovating smart. Seek the advice of a property manager before you start on your renovations as they’ll be able to tell you what changes will directly improve your rental or resale value.

3. Fully Understand the Area

If size, features, location and price are your only considerations when purchasing an investment property, you could be setting yourself up for failure. Why? Because a property’s long-term value is largely determined by the rest of the neighbourhood and its inhabitants. Before you purchase, ask yourself the following questions:

·        What is the demographic of the local area – are your neighbours interested in and capable of increasing their own property values?

·        Are there signs of economic growth in the area, including increased local business activity, employment opportunities and investment in infrastructure?

·        Does the property you’re interested in have unique selling points, or is there many similar properties on the market that could lead to oversupply later down the track?

The bottom line: Look for properties located in neighbourhoods that are geared towards strong growth.