If you are buying a home, the factors affecting suburb choice are often different from those involved in deciding on an investment location. When considering how to choose a good suburb to live in, you’ll need to think about your current requirements as well as future needs. Some people limit themselves to the suburb they already live in (or one close by) and could be missing out on other locations where they’d enjoy the lifestyle. Many buyers don’t have that luxury, whether due to budget constraints or a lack of availability of suitable property, and will need to cast their net wider.
Some of the key factors in choosing a location for your home include:
- Your local knowledge – are you already familiar with the area?
- Community – do you know people who already live there and/or are the locals similar to you?
- Availability of transport to work – good roads or public transport links.
- Proximity to good schools – particularly if you are relying on the public education system.
- Lifestyle – what is close by for you to enjoy during your leisure time?
- Affordability – the bottom line…
We have a service called a “Getting Started Session” where we help our clients gain clarity about what sort of property they can buy, where they can buy it and how much they’ll need to spend. One of the three key areas we explore in this session are the suburb options. Often we set “homework” which entails getting to know suburbs that might be a good fit. We suggest weekend excursions to check out cafes, parks, shops and get a sense of whether the locals are “PLUs” (people like us…). We also recommend trying out the weekday commute and looking into the schools.
For property investors, knowing how to choose a good suburb is the critical first step. Our investment philosophy is to buy low risk by focusing on capital growth first, yield second and there are eight solid reasons why this is the case.
When choosing a suburb to buy in, we encourage investors to consider the following:
- Buy as close to the CBD as you can afford – you can usually rely on consistent demand from tenants.
- Good transport links – especially train or light rail.
- Walking distance from cafes and shops – tenants need reasons to live there other than just being close to work.
- Avoid suburbs that are over-developed with new large scale apartment blocks.
- Look for a large proportion of owner-0ccupiers.
- Make sure the area feels safe – do locals walk around at night?
By choosing the right suburb, you’ll be giving yourself the best possible opportunity for capital growth. Of course, the second piece of this puzzle is the asset selection as each suburb has its own set of characteristics that an above-median-performing property must have.
First published: 21 July 2009
Updated: 20 March 2018
Please note: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.