Despite the ups and downs of recent years, property investment is still worth it - and certainly worth all the research, tax, and legal details that come with it.

Put simply, property investment can grow your wealth over time.

So, if you're planning to take your first dip into property investment, congratulations!

But you still have to be smart about what property you buy and if you're new to property investment, this might be hard.

How can an investment property help me?

An investment-grade property will give you long-term capital growth and rental yields as well as a steady cash flow, secure income and tax benefits.

You may also be keen to explore the ups and downs of negative and positive gearing.

Of course, there can be tough times such as we're seeing right now, with rising rates; and a turn towards tenant's rights, rather than that of a landlord, to say nothing of investors fleeing the market.

But as any kind of homeowner will tell you (just ask your parents or grandparents) - such times are par for the homeowner course.

Plus, the pandemic resulted in a once-in-a-generation boom such as we saw in the Global Financial Crisis in the 1990s or the mining boom of the 2000s.

Or, in other words, the property market goes up and down, in varied "cycles" - and it doesn't need even one of our favourite property experts, Michael Yardney, of Metropole, to confirm that 2023 will most likely feature (another) reset of the property market, with a new cycle beginning.

So, take a deep breath and read on. 

1. You're not buying for you

We wanted to pop this point in first as it can be difficult to remember when you're caught up in the dramas of house-hunting.

As a property investor, you're buying this house for someone else so whether you prefer a red brick, vintage home or an ultra-modern place doesn't come into play.

What does matter is that this house you're buying needs to attract as many people as possible - and for the long term.

At the same time, an investment-grade property still needs to be a well-built home with quality fixtures and fittings - unless you want to do a big renovation.

2. Location 

It should be no surprise that location is crucial to what makes any property tick.

Mr Yardney describes location as the point that will do around 80% of the heavy lifting of a property investment's capital growth.

But don't be fooled either by the labels surrounding a drab neighbourhood with a grimy reputation.

Neighbourhoods can feature both an array of Stay Away suburbs and Tres Magnifique ones.

At the same time, an investment-grade property should have a low crime rate and be well away from places that are the opposite. 

State police websites will usually feature crime rate maps, data and similar so it's easy to run such a check. 

But you may also want to check with your local government offices and similar as we've personally seen Tres Magnifique suburbs featuring almost double the number of "offences" as that of Stay Away suburbs

On another note: Mr Yardney recommends that property investors go house-hunting in locations with a limited new supply of houses and land - which he said could mostly be found in the inner and middle-ring suburbs of capital cities.

"High demand and limited property supply lead to capital growth and rental growth," Mr Yardney said.

"In contrast, outer suburbs generally have an unlimited supply of land and new houses, which is the enemy of capital growth."

3. Infrastructure and Amenities

Be on the watch for properties set within a "20-minute neighbourhood".

An investment-grade property will be within easy walking or driving distance to shops, schools and transport including major road and rail links to employment hubs.

Proximity to medical and health spaces and recreational areas such as parks and restaurants is also crucial.

And, people want at least some of these amenities to be quality ones.

It's a great idea to also look at government spending on local roads and other transport links as well as hospitals, parks and other infrastructure and amenities.

Also, look at what is being planned for the local area in the near future such as industrial or business hubs, highways, parks and hospitals.

4. Employment Hubs

Similar to the above point, employment hubs don't necessarily mean investment-grade properties have to be close to a major city.

We're talking about growing, and diverse, employment areas such as a nearby business park, government buildings or light industrial zone.

Mr Yardney also believes investment-grade properties should be in areas where resident incomes are growing faster than the state average.

"That’s because moving forward our property markets will be more fragmented - blue-collar areas and lower socio-economic areas will suffer more from the ravages of inflation while those with stable and increasing incomes represent a more stable property market," Mr Yardney explained.

5. Gentrification

All of the above invariably lead us to the positivity for property investors of gentrified (or soon to be so) neighbourhoods.

"It’s a way of forcing up your property’s value without lifting a finger and while you are sleeping," Mr Yardney said.

A fun description of a trend we're seeing a lot of lately, wherein older buildings and residents make way for those that are updated and trendy - while still appreciating (sometimes) what the vintage era has to offer. 

"Gentrification is a positive factor for property investment because it brings economic benefits and improvements to an area which in turn creates more demand and therefore attracts higher prices for local properties," Mr Yardney said.

We're here to help

Whatever home loan road you wish to take, Lending Loop would love to help you travel it!

We’ve brought all the services you need altogether, under one roof, so we can find you the best home loans from more than 40 of Australia’s biggest banks and specialist lenders.

Plus, we can also help you refinance your loan to help you keep more money in your pocket.

So, give us a call today at Lending Loop.