Picking a winner – property research strategies

Investors seeking maximum rental income and capital growth must invest in property that is high in demand and is also limited in supply.

What are some important demand drivers to keep in mind?

Essential demand factors to consider when assessing a property for investment are demographic and social changes, because these influence where people want to live and what kind of property they want to live in. 

An example of social change is the lifestyle preferences of today’s Australians. We tend to see ourselves as more sophisticated today than we did a few decades ago. We are more focused on lifestyle and, as such, residing in fashionable locations is becoming more desirable.

Investors may benefit from capitalising on these preferences by investing in property near café strips, close to rivers, beaches or harbours, and in inner city locations rather than rural locations. 

Another key factor responsible for driving demand is demographic trends. For example, many baby boomers hold the view that the prosperity they have worked hard for is to be spent on lifestyle. Many are trading their large suburban homes for smaller lifestyle-oriented properties located close to the ocean or near café strips.

Younger generations, particularly those in their 20s and 30s, are also attracted to lifestyle. It is common for these generations to delay marriage or starting a family to allow themselves to achieve career goals. Single family households are also on the rise.  

These demographic phenomena point to smaller, lifestyle-oriented dwellings close to good amenities, transport, schools and workplace being in higher demand in the coming years.

When you are considering the many factors that drive demand, remember to look for properties that appeal to both owner-occupiers and tenants.

After all, many of the features of a property that are valued by owner-occupiers are also sought by tenants.

For example, bedroom size, a usable kitchen, storage, and car parking are just as highly valued by today’s tenants who will pay good rents for these features.

If you would like to learn more about professional research strategies, check out our new ebook ”How to find investment-grade properties using professional research principles”.