What makes a good investment property?

Ever wondered why house prices in some suburbs outperform others? It’s partly due to a suburb’s amenities or the lifestyle features on offer.

Better amenities can drive buyer and renter demand higher, as more people are attracted to areas that provide greater lifestyle offerings. Similarly, renter demand – and, in turn, property value – will be higher for houses and apartments that come with added comforts and perks.

As you're looking for the right investment property, our Home Lending Specialists can give you free property reports with handy info about a property itself or suburb as a whole – no strings attached. Our Mobile Lending Managers can even come to you.

In the meantime, here are some features to look out for when choosing the best suburb and property to invest in.

4 minute read

Features to look for in a good investment suburb

1. Café/retail precincts

Suburbs with a good café or retail strip can be in higher demand as people typically want to live close to precincts where they can meet family and friends to shop, eat and socialise. This can also be the case for suburbs with, or nearby, large shopping centres that offer dining options, cinemas, supermarkets and retail outlets.

2. Access to public transport links

As the populations of our capital cities increase over time, so too does congestion. This can lead to more people wanting to live in suburbs with good transport links like train stations, bus exchanges and well-connected roads so they can commute more efficiently.

3. Public open-spaces

Compared to a generation ago, land sizes for metropolitan properties are shrinking, leading to smaller backyards. Being close to public open-spaces like parks, beaches and rivers can be highly desirable, as they give locals a place to meet others, exercise and walk their pets.

4. Schools

Families need to live in certain catchment zones to be eligible to send their children to specific public schools, so demand can be higher for properties that fall within the areas of the higher-ranked public schools. Demand can also be higher for suburbs near good private schools, as some families want to live closer to their children’s place of education.

5. Close to major employment hubs

Given that many people have to commute to their place of work on a regular basis, suburbs closer to major employment hubs can be in higher demand. This can include areas nearby capital city CBDs, as well as second-tier employment hubs in metropolitan areas.

6. Rezoning opportunities

Residential properties will typically be classified within a particular zone that dictates the number and type of dwellings that can be built on that piece of land, as well as the density.

The zoning is determined by government, typically local councils. When properties are rezoned for higher density, it can increase their value as they have more development potential - for example, if a property’s zoning is changed from a single dwelling to a duplex or triplex. Buying a property before it’s rezoned can be risky as there‘s no certainty that the zoning will change.

While these lifestyle offerings can help drive buyer and renter demand higher, these are just some of the features that help make a good investment suburb.

It’s also important to consider the supply-side drivers of the property market, as this will also influence how well properties perform in one suburb compared to another – understand more about supply, demand and other basics of property investment.

Features to look for in a good investment property

1. Air conditioning

Given the unforgiving temperatures of the Australian summer, air conditioning can be a major draw for tenants. If a property doesn’t have air conditioning, having one installed could make it more competitive.

2. A good internet connection

In an age where we spend so much of our lives online and particularly as more of us are working from home, a reliable and speedy WIFI is becoming increasingly non-negotiable. Having a solid internet connection will make your investment property that much more appealing.

3. Parking

A parking option for tenants is a major plus, and especially one that is safe and secure. This is particularly important when it comes to apartments or properties in higher density areas where parking isn’t necessarily a given.

4. Appliances

A rental property already fitted out with basic appliances will be in high demand from tenants who aren't willing to spend money on a brand new appliance they may no longer need once they move out. For example, including appliances like washing machines or dryers in your investment property (and having space for an internal laundry) will save your tenants a lot of hassle and make your investment more attractive.

5. Outdoor space

Particularly in inner-city apartments, outdoor space can be hard to come by. Amenities like small backyards and balconies can add value to a property and make it stand out.

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The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. Also to the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accept no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.