Why You Should Invest In Medium Density Property
Regardless of the overall property investment strategies you are following — one that is based in positive cash flow or high growth, for instance, or a mixture of the two — the underlying principles guiding the sort of investment property you buy will largely be the same. Your goal should be to invest in real estate in areas where there is the potential for growth, and/or in sectors where there is, or is likely to be, increasing and ongoing demand.
A number of factors can drive growth and demand, but two sectors where property advisers expect there to be an ongoing need and which will therefore provide a range of investment opportunities are dual occupancy properties and medium density housing.
Medium Density Property
Another option for people looking to create wealth with property is to invest in what is known as medium density housing.
The term medium density property generally covers townhouses, duplexes and larger apartments in blocks of three storeys or less. There has been an upsurge in demand of this sort of property recently, often by young families who want to live in relatively central city locations but need more space than most units provide, or older people who are looking to downsize and reduce their housing costs but don’t find a large apartment block or retirement village appealing.
Rising rents for houses in Sydney and other major urban areas is also driving demand for medium density properties.
Why is medium density property a good investment opportunity?
If you want to build the equity in your home as part of your property investment strategies, there are some steps that you can take that will help speed up the process.
For instance, property advisers will suggest that you make additional mortgage repayments whenever you can, or increase the size of your regular monthly payments. It might also be helpful to change loan providers in order to benefit from lower repayments, while at the same time maintaining your existing repayment levels, so that you are paying down your loan and growing equity more quickly.
Another way in which you can effectively grow the equity value in your home is through connecting your mortgage account to an offset bank account. This effectively reduces the amount of interest you pay on your mortgage, and therefore means you are paying down the principle more quickly.
However, despite the growing demand, research from CoreLogic has found that there is a significant lack of medium density properties in NSW and across the country, meaning that this sort of housing represents an excellent investment opportunity.
This growing need for a more diverse range of properties in what are termed ‘middle-ring suburbs’ is unlikely to diminish as our population grows in major urban centres, in particular in Sydney and Melbourne, and so investors should undoubtedly consider medium density as part of a comprehensive property strategy. With generally good transport links, established infrastructure and access to popular retail areas, there is broad appeal for medium density in housing in these middle ring suburbs across a range of demographics, while the current relatively limited supply means that rents for these sorts of dwellings are likely to be at a premium.
How to choose the right property investment strategies
If you’re considering property investment, it can be difficult to access accurate market information to identify high-growth areas or significant upcoming infrastructure developments. Interpreting property market data effectively also requires experience and expertise, which many investors may not initially have.
That’s where High Income Property comes in. Our expert team of property investment advisors uses the latest data and insights to help you make informed investment decisions. A professional property investment consultant can guide you through this information clearly, making it easier to choose properties positioned for high rental yields and capital growth. Additionally, consulting a property investment advisor in Sydney can provide tailored advice to ensure your investment strategy aligns closely with your financial goals.
High Income Property is committed to helping you navigate the market with confidence and clarity. Get in touch with us at info@highincomeproperty.com.au or call us on (02) 8007 4001 and we will be only too happy to answer your questions and help get you started on the path to smart property investment.