Here are some tips that can help you choose an a property that will increase in value. As a starting point, by looking for areas where growth is expected, there is potential for capital gains in the future.
1. Location, location, location
Not all pieces of land within one suburb are considered equal value. Things like close proximity to main roads and airports can decrease the value of a property. Whereas things like proximity to schools and popular restaurant strips can increase the value of a property.
It’s a good idea to look for increasing population and improved local infrastructure. If you tick these two boxes, you’re likely in a good place in terms of increasing property value.
2. Development plans in the local area
Check if the property is in a zone whereby there are any proposed changes that may affect future property pricing in the area.
The construction of large nearby developments can have either a positive or negative effect on the value of a property. They can block views and sunlight which can devalue a property.
You can often find out plans that are in the works via Government and local council websites.
3. Period features
If you purchase an older property with historical features, it’s likely to increase in value. But, not all period homes are everyone’s cup of tea. Finding a property that can still be modernised but some of the historical features can be left in place is likely a property that will go up in value.
For example, a Victorian home with high ceilings, a lace facade and original floorboards could be a great investment. Why? Because you can modernise the back of the property, but keep original features at the front. And even better, they’re usually found in and around CBDs and therefore should likely stay in demand.
There are some properties that will require a lot of work to keep them current. If you plan on eventually selling the property for a profit, you’ll want to make sure that you don’t end up over-capitalising in the future by doing extensive renovations and end up losing out.
4. The quality of the build
It’s always important to examine the quality of the build of a property when buying. Finding a property that is structurally sound with strong foundations and top-notch insulation is extremely important if you would like to make money on the property in the future. You’ll want to ensure that the property has been built with durable materials.
By getting a building inspection done by a professional, you’ll be able to understand what needs to be done to a property to improve the quality of the property. And if there’s a long list, it might not be a smart move not to buy it.
5. The size of the property
The size of the property is an important factor to consider when choosing a property with the hope that it will go up in value.
If you purchase a smaller apartment or house on a small piece of land, you’re unable to invest in extensions that will increase the value of your property.
Whereas if you purchase a property on a large block, you can renovate and extend the property. Or, you can resell and market the renovation potential.
If you purchase the smallest apartment or block on the street, in comparison to surrounding properties, it will likely be lower in value.
None of the above factors will solely determine whether a property will go up in value. It’s almost always a mix of location, era, size and a myriad of other factors, especially market conditions.