How to spot property investment opportunities early

Lifestyle changes brought about by the pandemic combined with record-low interest rates are likely to lead towards a host of new investment opportunities developing within the local real estate market. Those hoping to capitalise on such an opportunity ought to heed the advice of real estate experts to make sure they spot opportunities as they arise. When it comes to maximizing returns on real estate investments, it's all about knowing where and when to purchase, as these factors can make a significant difference in the kinds of returns one can expect to generate.

The guidance of an industry expert is crucial when making sound real estate investment decisions. Good real estate professionals are well-connected and will know of future development plans in their surrounding suburbs. They are also very aware of real estate prices and will be the first to know if demand for an area is starting to pick up. For these reasons, agents are best equipped to know when a suburb is about to take off and can let investors know when to time the market to maximise their returns.

Some tips on how to spot a property market investment opportunity early:

1. Look near established suburbs

Good investment opportunities usually arise in communities that lie just outside where all the growth is happening in the neighbouring established suburbs. Property prices are usually more affordable in these areas. But, because they are still within close proximity to all the action of the established suburb, these homes soon catch up in value as demand keeps growing in the neighbouring suburb and buyers spill over into the surrounding areas. Over time, homeowners invest and renovate the older properties in these areas and soon the once-affordable suburb becomes equally attractive to buyers as its more established neighbouring suburb.

2. Keep an eye out for new schools & shops

A sure sign of future suburb growth and ultimately price appreciation is if new schools and shopping centres arise. Renovations or upgrades to existing schools and shopping centres could also stand to increase the appeal of the suburb and bolster property values. The more desirable the school becomes, the more families will flock to the area, which will increase demand and ultimately lead to greater house price growth.

3. Rental Prices Increase

A good sign is that a suburb is growing in value is if rental prices in that suburb start increasing in value. This is a demand signal that often results from buildings having been upgraded and landlords having invested in their properties. It could also be a result of tenants moving into the area because it is cheaper than a more established area. Soon, this demand will drive up prices as more and more investors are drawn to the area owing to the high rental yields. Those who purchase in these markets early will have the best chance of maximising their returns.

The pandemic has resulted in demand from people wanting to buy further away from cities. Many now know that they can work remotely and enjoy the lifestyle elements. We are seeing this on the KZN North Coast, as well as inland in the midlands area. This could be a trend for real estate investors to watch. Investors who want to capitalise on this growing trend should investigate what outlying suburbs offer great lifestyle benefits that could be attractive to buyers who are wanting to escape the hustle and bustle of city living. They could also consult a local real estate expert who can help point them in the right direction.