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Investing in Australian property can offer attractive long-term rewards, from capital growth to steady rental returns. However, not all properties are created equal, and a rushed purchase can lead to regret down the track. In this blog post, we’ll break down a practical checklist for evaluating the investment potential of Australian real estate—covering everything from growth trends to rental yield, location factors, and more. We’ll also show you how Coposit can ease the deposit process, helping you secure the right property with confidence.
Research Historical Growth A suburb’s past performance can hint at its future trajectory. Look at median price data over the last 5–10 years, focusing on consistent growth rather than spikes. While historical trends don’t guarantee future results, they do provide valuable context.
Key Points:
Check reliable data sources such as CoreLogic or domain-specific property reports. Investigate nearby infrastructure changes—like new shopping centres or transport upgrades—that may spur further capital growth. Population and Demographics Areas with rising populations often see increased demand for housing—particularly if job prospects, schools, or universities attract newcomers. A thriving local economy usually translates into stronger capital gains.
Key Questions:
Are families, students, or professionals driving this demand? Is there a diverse range of employment opportunities nearby?
Gross vs Net Yield Calculate both gross yield (annual rental income / property purchase price) and net yield (rental income minus expenses / purchase price). While gross yield offers a quick snapshot, net yield provides a clearer picture once costs like council rates, maintenance, and property management fees are accounted for.
Example:
Property Purchase Price: $500,000
Annual Rental Income: $25,000 (which is $480/week approx.)
Annual Expenses (management, rates, etc.): $5,000
Gross Yield = $25,000 / $500,000 x 100 = 5%
Net Yield = ($25,000 – $5,000) / $500,000 x 100 = 4%
Vacancy Rates Low vacancy rates mean strong tenant demand, indicating you’re more likely to avoid long periods with an empty property. Check local or postcode-specific vacancy data via property portals or state real estate institutes.
Tip: A rate below 2% is usually considered a landlord’s market, while anything above 3% can signal higher supply than demand.
Proximity to Amenities Properties close to public transport, schools, shopping centres, and healthcare facilities generally attract higher demand—both for rentals and purchases.
Checklist:
Transport Links: How far is the train station or major bus route? Daily Needs: Access to supermarkets, pharmacies, and banking facilities? Lifestyle Amenities: Parks, gyms, cafés, and entertainment venues? Future Infrastructure Keep an eye on local council or state government announcements. New roads, rail extensions, and town centre renewals can significantly boost an area’s appeal and property values.
Questions to Ask:
Is there a planned motorway or rail upgrade nearby? Are there any large commercial or residential developments in the pipeline? Safety and Community Areas with a strong community spirit and low crime rates often have higher owner-occupier demand, which can push prices up over time. Check local council websites or social media groups for insights into the local community vibe.
Building and Pest Inspections Even a property in a prime location can prove a costly mistake if it has major structural or pest issues. A professional inspection is non-negotiable—budget for it to avoid unforeseen repair bills.
Renovation Potential A well-located property needing minor cosmetic upgrades can yield solid returns through a strategic renovation. On the flip side, major structural overhauls might not be worth the financial and time investment, unless you’re experienced with these projects.
Loan Pre-Approval Before hunting for properties, secure pre-approval from a lender to understand your borrowing power. This helps you focus on realistic price brackets and negotiate confidently.
Budget for All Costs Remember to factor in stamp duty, conveyancing fees, building insurance, and any lender’s mortgage insurance (LMI) if your deposit is below 20%. Creating a comprehensive budget helps you avoid unwelcome financial surprises down the track.
While the above checklist can streamline your property research, saving for a large deposit is often the biggest hurdle for investors—especially if the market moves faster than you can save. That’s where Coposit comes in:
Search & Connect Explore off-the-plan developments and other new-build opportunities in your preferred suburbs via Coposit’s online marketplace.
Get Coposit Qualified Coposit assesses your weekly payment capability and future mortgage capacity, helping you choose an investment property within a comfortable budget.
Own While You Save Instead of a hefty upfront deposit, secure the property with a minimum $10k deposit, then pay the remainder in weekly instalments into Coposit’s regulated trust account—all fee-free and interest-free.
Collect Your Keys By the time the property is complete, you’ve saved your full deposit. Finalise your mortgage, pick up your keys (or your tenants’ keys!), and start reaping the benefits of property investment.
Why It Matters: Coposit’s flexible deposit model lets you lock in a property at today’s price—before market values potentially rise—making it an appealing approach for both first-time and seasoned investors alike.
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