Get in the know: Hotspotting

Finding the perfect property location has been a major goal for most home owners and investors. While it is often advised to look beyond hotspotting when valuing property as future property values can never be predicted, there are several straightforward factors that you can take advantage of.

  1. The Basics: Supply and Demand. Understanding how one affects the other will give you an idea as to how properties in a certain area will perform. A high demand area with low housing supply can be favorable for investors. Knowing how these two correlate with each other in various circumstances can definitely help in your decision to purchase property at a certain location.
  2. Infrastracture. This is a key component in valuing an areas worth. A high growth rate in infrastructure, roads and other amenities can greatly help increase the value of your investment. Be a step ahead and learn the upcoming infrastructure projects in areas you’re interested in.
  3. Hotspotting and Price. Even if the property location is in a high demand area, if you can’t afford it, don’t buy it. Market values fluctuate and downward movements in the market can be disastrous for you.
  4. Historical data. It’s great to have a sense of history, but it is of no use in the property market. Historical growth rates in areas should never influence your decision to purchase or invest. Focus on the numbers that matter: the current median value and capital growth.
  5. Employment. Income is a factor in capital growth. If the community is not earning, no one can afford to purchase your investments.

Read more about this on the Property Observer website.

Author: Dorian Traill

Dorian Traill is the current Director of Grand Capital Finance Group and Fountain Property Group. He specialize in home loans for people as well as helping them build wealth through quality investment properties that ultimately lead to long term financial freedom.

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