Finding an Investment Hotspot<< Back to Blog
Without a crystal ball it is impossible to know for certain exactly how the market will perform, but as the old saying goes, knowledge is power.
When it comes to property investing, one of the common buzzwords is ‘hotspot’. But, if it’s currently being called a hotspot, then you are probably too late.
Hotspots are areas where property values are about to experience significant capital growth.
Buying and selling property is all about timing, research and preparation.
There are certain indications that an area or suburb may boom, but none of them are set in stone – you can never be sure.
- Does demand, for whatever reason, exceed supply?
- Is the area’s increase in price significantly greater than the region as a whole?
- Does the area have low prices, which are expected to rise in the near future?
- Are neighbouring areas experiencing good capital growth? Buyers who can’t afford their favourite area will often look at a neighbouring location. And then the demand pushes prices up.
- Are there positive developments happening in the area (e.g. a new railway or arterial road to the city that will impact positively on capital gains)? Check with council for proposed transport developments as they will often increase prices.
- Look for telltale signs that a rundown or unfashionable area is changing. Things like newly renovated properties or trendy coffee shops opening.
If you have done your research and still find it difficult to pinpoint the next hotspot, don’t get discouraged. Location is just part of smart property buying. You can get the location spot on; but if you pay too much or choose wrongly within an area, you could be waiting longer to see profits or capital gains from your purchase.