This is a transcript of a Let’s Chat YouTube video explaining how to find promising real-estate ‘hotspots’. It advises using median suburb prices, researching areas before wider market interest, considering regional (accessible, diverse) locations, and watching indicators such as the ripple effect, gentrification, sustained population growth, rezoning/infrastructure, new major stores, school performance, and setting Google Alerts for local news.
Chapters
So how do we find the property? You could use the research of the median prices that fits your price range. That is available in most property magazines. They have the data at the back of the magazine. They're going to tell you the median price of a suburb and they're going to sort them between houses and units. Now, we use the median values as these represent the typical property for the area. Not the best, not the worst, rather the one that the majority of people want to live in. As a homeowner or as a renter, buying the typical property is a sensible way to minimise your risks. You should look at what you are trying to achieve, what you can afford, and then the areas that you potentially will deliver this to you. So really, you're looking for your next hotspot first. What's a hotspot? To me, this phrase gives the impression that you're taking a punt on what others are saying, not on your own research and requirements. However, as Terry Rider from Hot Spotting will tell you, finding the next area that will exhibit both growth and yield characteristics is all about thorough research. So how do you find areas that will outperform the market? And more importantly, where are they? Australians have been very city centric with their investing decisions. However, as affordability declines and regional investment increases, regional areas should be on your list of areas to consider. This is not one horse, one industry towns. Rather, as Terry Ryder from Hot Spotting defines it, it's accessible regional areas with good, good prospects and a well rounded, diverse economy. And these do exist. There are risks associated with regional investing and you should be aware of hotspots, for example, associated with mining booms. These can and in some cases have experienced setbacks where for an example, a major mine cuts back on employment and demand for housing suddenly plummets and therefore causes prices and rentals to fall. Better to go for long established regional centres with stable population bases and diverse economies. These three points below introduce how you might look for that next hotspot. I want what she's having. Let's think of where people aspire to live. Think of the good areas in your hometown. What characteristics do they have? Usually these areas are suburbs with a nice feel, close to shopping, maybe a cafe culture, neighbours who are like minded or who you want to be like, good schools, maybe close to the cbd, that is close to work, a nice area and nice streetscapes. The issue is these areas are usually outside your price range and they may have already been through their growth phase. So how do you find an area that you can afford in an Area where people want to live. Essentially you apply the same criteria. Your job is to research and find the areas whilst they are still affordable and before everyone else finds them. Then hold on while you ride the long term capital growth wave. The most promising properties are usually located in suburbs that are part of the ripple effect. That is the surrounding suburbs have the works, but the surrounding areas have have not taken off yet. Or there's suburbs where some degree of gentrification or council and local business initiatives are improving the area. So let's look at number two. Increased and sustained population growth. This is usually driven by one driving factor. This could be new legislation, infrastructure changes or rezoning. For example, you might find that lower priced areas, areas within commutable distances from the cbd, shot up in value when the Australian government announced the first home buyers grant of $14,000 years ago. Or the substantial change in population growth in Mount Barker that occurred between the 2001 and the 2006 census because the area became more commutable due to new roads that connected it to the city. You'll also see changes in population growth. When an area is rezoned to be residential, it pays to watch where the big companies are opening their stores. You can bet the Coles know something about population demands of an area if they're committed to opening a new store there. Then there's the X factor. Now the X factor you have to be watching to catch these changes. In recent years the My Schools website which rates schools has been published. The best performing high schools generally only take students from that catchment area. So guess which suburbs went up in value. There are many X factors. Your job is to find out what they are. What will drive growth in an area. Now one way of doing this is to set up a Google alert on the suburb that you are interested in. Every single day you can get an email about things that are relevant to that suburb. So maybe the announcement of a new Coleslaw hospital or infrastructure or even crime rates. You want to know this information? Google alerts will deliver that to you.
