Whether you are buying property to live in, or as an investment, those properties that have greater owner occupier appeal generally perform better long term than other properties that may be considered investor type products. But what does this mean, and how can we ensure that a property we are buying has good owner occupier appeal in the current Brisbane property market?
Whether you are buying your first home, upgrading to a family home, downsizing to a smaller home or purchasing an investment property for others to live in, it is a good idea to ensure that you are buying the type of property that ticks all of the boxes for how and where people want to live. This may come as a surprise to some investors, who may consider buying with a calculator in an area that shows a good yield is the only way to go. But remember, if your strategy is to build wealth through property, then understanding the key drivers of capital growth over the longer term is so important.
It is capital growth, not rental yield, that builds long term wealth in property.
Remember, the property market is dominated by owner occupiers with more than 65% of Australians living in a home they own outright or with a mortgage according to the most recent census data. Therefore owner occupiers represent the largest segment of the market. This means that properties with better Owner occupier appeal will be the properties that are most sought after by the largest segment of the market both now and into the future.
Even property experts such as John McGrath agree with this principal – even if you are buying an investment property and not a home.
Buying a property with owner occupier appeal usually involves analysing suburbs to determine the best streets, school catchment zones, proximity to local amenities etc. Properties with good street appeal, in quiet leafy neighbourhoods and with desirable layouts and floor plans will always appeal to the owner occupier and therefore attract premium prices.
Homes with owner occupier appeal are the types of properties that the majority of people want to buy when it comes time to re-selling, and the types of homes that people want to rent when you actually own that property as an investor.
Investor grade properties may be those that are less desirable for the owner occupier. They may be properties that have a small living area, close to industrial or commercial areas, located on busy roads or in areas where there is little or no street appeal. Whilst you may generally find someone to rent these properties, when it comes time to re-sell the potential target market for these types of properties may not be as wide or as large due to the lack of appeal for owner occupiers.
So when looking at buying property in Brisbane, or in any other area for that matter, consider the factors that impact on owner occupier appeal and ensure that you are factoring in as many of those things as possible in your property buying decision.