[Podcast] What makes an investment-grade location? With Brett Warren | Summer Series

Location, Location, Location!

In today’s podcast, we’re going to dive deep into the world of property investment and explore the importance of location in achieving long-term success. And more importantly, what makes an investment-grade location.

Joining me today is Brett Warren, National Director of Metropole Property Strategists, to share his expertise and insights into what makes a great location for investment.

Whether you're a seasoned property investor or just starting out, today’s podcast will provide you with valuable insights and practical tips to help you make informed decisions and achieve your investment goals in our changing property markets which are very fragmented.

What to look for in an investment-grade location

Location, location, location!

I’m sure you’ve heard about the importance of location.

In fact, you've probably heard me say that the location of your property will do around 80% of the heavy lifting of its capital growth.

But what makes a great location for investment? That’s the topic I’d like to discuss today with Brett Warren National Director of Metropole Property Strategists.

Factors that make an investment-grade location

There are many factors to take into account when looking for your next investment property, but if you do your research to find an investment-grade location, you’ll be well on the way to making a good investment decision.

1. Demographics.
2. Supply and demand
3. Employment opportunities
4. Infrastructure and amenities
5. Walkability
6. Gentrification
7. Attractive neighbourhoods character
8. Low crime rate

What are the different types of locations?

Not all real estate locations are equal and just like there are different precincts on the Monopoly board, there are basically 4 types of locations where you could buy properties in the real world, and some are much more worthwhile than others.

1. Discretionary locations

These are the most expensive locations in our capital cities – the “established money” locations where most of the residents have lived for a long time and where many residents have paid off their home loans years ago.

2. Aspirational locations

These are the upper-middle-class areas and gentrifying locations of our big cities which would also be considered A-grade suburbs.

3. Affordable locations

This is where most homeowners and many investors look because that’s where they can afford to buy. However, sometimes investors buy in these suburbs because they are “advised” to buy at the cheaper end of the market.

As an investor, I would steer clear of these affordable locations – most of these will never gentrify in your lifetime and they will underperform with regard to rental growth and capital growth.

4. Last choice locations

In every city, there are suburbs where people live because they really have no choice. No one wakes up in the morning wanting to live in these suburbs, but social circumstances force them to.

Of course, investors should steer clear of these locations.

A final note…

Remember that the location isn’t the only thing to consider. Owning the right property in that location is just as important.

So be careful … don’t get stuck with an underperforming property in the wrong segment of the housing market, because if history repeats itself, and it most likely will, you could end up with a dud property that you will regret owning and have difficulty selling if you need to.

Links and Resources

Michael Yardney

Brett Warren – National Director Metropole Property Strategists

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Some of our favourite quotes from the show:

“Your future income’s going to be dependent on your tenant’s ability to pay rent, and higher rents over time.” Michael Yardney

“There are jobs and there are jobs. And again, it’s not a judge of people, but Australia is becoming a knowledge-based society. People in the higher skill levels get paid a lot more.” – Michael Yardney

“I’d rather own a family-friendly apartment, or a townhouse, in a good location than a house and land in a poorer location.”  – Michael Yardney

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