If you want to secure an ideal investment property in Melbourne’s east you must first gain insight into what it is people are looking for when they move into a particular area. From there you can identify specific areas and property types with the strongest potential for growth and return on investment (ROI).
While finding the right location may begin with the suburb, there are many other factors to take into consideration. Look for properties that have street appeal and easy access to lifestyle amenities and transport options. The property should also offer security, off street parking and have the potential to add more rental value through renovations.
What Attracts People to the Eastern Suburbs?
Melbourne’s eastern suburbs have a strong track record of high performing property investments. This is partially due to the comparative affordability of properties, as well as its distinct communities, neighbourhood attributes and unique property growth cycles.
Residents range from working-class families and singles to the more affluent, all of whom enjoy access to well-positioned and high-quality amenities, great transport links and reputable schools. With only 33 per cent of residential properties in the eastern suburbs being apartments, the lure of more land and larger homes at a more affordable price is a major drawcard.
Look for Locations That Outperform Averages
Look for an investment property in an area that has a long history of strong capital growth and is likely to continue to outperform averages in the area. Example suburbs in the east include Camberwell, Canterbury, Hawthorn and Kew which have consistent high demand from families who send or want to send, their children to one of the 20 private schools located in the area.
Other suburbs that show consistently strong growth include:
Many people moving to these areas are looking for affordable, family-sized homes in an area that can offer a quality lifestyle. Investors should look for nicely presented streets close to lifestyle amenities such as parks, schools, cafes, restaurants and public transport. Before committing to buying a property take time to investigate what the council has planned for the suburb that may positively or negatively impact the area in future as this could have an effect on your rental capacity.
Growing migrant populations are driving demand for affordable rental apartments in areas like Box Hill, Nunawading, Doncaster and Ringwood, which are recording annual growth levels of around 9 to 10 per cent, therefore, buying an apartment in one of these areas is certainly worth considering.
Buy a Property Where You Can Manufacture Capital Growth
Aim to purchase a property where you can manufacture capital growth through renovations, refurbishments and redevelopment rather than relying solely on the market to deliver capital growth. This could include choosing a property you can improve or one that has subdivision potential.
Purchasing an older property and investing in renovations ie. paint, new flooring and a budget bathroom and kitchen makeover can often generate a better return on investment than purchasing a newer property.
Want more advice on where to buy an investment property? Talk to one of our team members today.