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Why location is key in real estate

  • February 24 2022
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Invest

Why location is key in real estate

By Noemi Pamintuan-jara
February 24 2022

For property investors, growing wealth depends on rental income or capital gains, and these are both anchored on the popularity of a property’s location among tenants and buyers.

Why location is key in real estate

Why location is key in real estate

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  • February 24 2022
  • Share

For property investors, growing wealth depends on rental income or capital gains, and these are both anchored on the popularity of a property’s location among tenants and buyers.

Why location is key in real estate

This is why it’s essential to know what makes the location of a property in demand to your target clients.

Based on a recent Raine & Horne article by property management business support manager Maria Milillo, here are three factors to consider when choosing where a property is built:

1. Accessibility

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A 2017 study by RMIT University revealed that Australian city workers spend an average of 66 minutes on their daily commute.

Spending that much time on the road affects productivity. And this is why Aussies are attracted to residential properties near schools, employment hubs, healthcare facilities, and those with lifestyle amenities.

Properties in locations that link all these living essentials in a commuter-friendly system help elevate the quality of life of renters and buyers, making them the preferred choice for comfort and convenience.

To make a location accessible to commuters, Ms Milillo points to the presence of “significant roadways or public transport options such as trains, buses, trams, and ferries”.

Explaining why properties in these strategic locations are a good investment, she said: “Such properties will likely achieve decent growth and occupancy levels that will drive up rental returns.”

2. Located in a regional growth centre

Breaking into the investment property market with a modest budget?

Raine & Horne has highlighted lower entry costs in regional centres than city markets with “yields as high as 7 to 8 per cent”.

But Ms Milillo also cautioned investors to practice due diligence before investing in a regional site.

She rounded up these essential points to look for before taking the plunge into the regional centre market:

  • A stable population growth that can fuel the economy, which, in turn, can provide employment opportunities.
  • A diverse economy that is not dependent on just one industry as a safety net when that industry crashes. Look for an economy with diverse sectors “such as mining, agriculture, education, health, and retail” because “that can provide ample employment opportunities”.  

Ms Milillo advised that this economic and population information is usually readily available from the local council’s website.

3. Safety and aesthetics

No one wants to live in a dangerous community that can put your life and property at risk. Locations with low crime rates and those that have “attractive landscapes and community spaces can all help to boost a location’s appeal”, Ms Milillo raised.

Overall, a safe neighbourhood is essential to one’s peace of mind. Knowing that you can sleep soundly at night and commute the next day out of harm’s way can be a very appealing factor for tenants.

Why location is key in real estate
Why location is key in real estate
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About the author

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Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

About the author

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Noemi Pamintuan-jara

Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

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