It is essential when setting out to find a property to do your research. Sure a Buyers Agent and Buyers Advocate should have the majority of information on tap for the suburbs and cities they focus on, however to yield the best results it pays to do your own research and identify some key suburbs/towns you would like to explore further. Don’t fall risk to staying focused on the area you live in just because you are comfortable living there, your potential renter pool may not feel quite so strongly and this will be reflected in your rental income.
Two key areas you should be researching are demographic and economic indicators of a region and setting benchmarks on these to help narrow down your search.
Here are a few data points to set benchmarks for, which also have freely available sources that can be researched predominately online.
Population Size – This one is typically a personal preference in terms of what population size of a town/suburb you are comfortable investing in. My preference is nothing less than 17,000 for a town (however I do make some exceptions where certain industries are active) and stems from my belief that there is a much higher likelihood of growth stagnation under this level.
Population Growth – Identifying the growth trend of a town can quite quickly remove the sustained downward areas from your list. However where you do see growth trends you need also to determine if the drivers behind this are short or long term.
Population Age – Age can indicate a lot about the property type that will deliver the best gains for you over the long term. If your tenants or potential future purchasers are more likely to be retirees than young students, than I most likely wouldn’t suggest a property next to a pub.
Local industry and employers – If an area is dependent on only one or two industries or employers than the fate of the property market will normally be linked to it.
Employment and Wage – Employment levels and wealth indicators can help give you an indication of potential for rental vacancies and growth.
Homeownership – Levels of homeownership can give you a quick indication of rental market size of an area.
Some online resources with datasets and visualisation tools that should make your life easier:
ABS – www.abs.gov.au or try betaworks.abs.gov.au for some new tools
Mashup Australia – mashupaustralia.org
data.gov.au – data.gov.au
informed decisions – home.id.com.au/id-community/public-resources/social-atlases
Also don’t forget to check out local council and regional government sites.
I will cover off local infrastructure in a future post and touch on some indicators that can be easily sourced such as schools, universities, hospitals, government agencies, age care homes and senior citizen centres.