When new home buyers are looking for their first home, it's not often at the top of their priority list to look for a collapsing property.
However, 12 years ago, Mark Armstrong, CEO and co-founder of the RateMyAgent real estate reviews and ratings website, did just that. He bought a house in Northcote, Melbourne, an inland northern suburb which he describes as "full of old houses and tired old infrastructure" when he entered the market.
But, as Armstrong explains, "first-time home buyers should think of themselves as first-time property investors – because their first home is unlikely to be the home of their dreams."
"It should be a stepping stone to bigger and better things," he says.
Today, the suburb of Northcote has reinvigorated, and property values ??have exploded as a result, revealing a sound strategy for the take.
"Buyers should look for emerging areas with excellent infrastructure that may be old and dilapidated but ready for gentrification," advises Armstrong.
Treating your first home as a propeller in future wealth could potentially lead you on the road to giving you the financial capacity to buy your "dream" home. But what other aspects of a site should first time buyers keep in mind?
Look for a suburb that has potential
Access to stable employment is one of the main drivers of future growth.
"Large cities have large financial, educational, medical and government institutions that provide a very solid job base, regardless of what is going on in the economy in general," says Armstrong.
"We still need teachers, doctors, nurses and access to money, so real estate close to this type of workforce ; artwork tends to be a more reliable long-term investment. ”
The growth of regional areas should not be overshadowed by the city's pioneers. A more affordable entry point can also be accompanied by proven capital growth in some outlying neighborhoods.
Armstrong proposes to refine the regional areas that are easily arranged on a train line. He says that "it gives you quick access to the city and is wise from an investment standpoint".
"It will be more attractive to [potential future tenants] who are looking to make a tree or change the sea while staying connected to a big city," he shared.
Purchases in a capital
Although there are many lifestyles and economic returns that make living in an attractive capital, Armstrong says the most affordable locations for home buyers will be further from public transportation and shopping .
"If buyers have a choice between a modern property in an isolated area or an older property in a more established area, I would certainly choose the latter", Armstrong shares.
For buyers who have a tighter budget and are looking for which parts of their buying criteria they should drop or keep looking for, Armstrong says they should stay focused on the things they they cannot change and compromise on the things they can change.
"For example, they cannot change the location, the size of the land or the position in the block if it is an apartment," says Armstrong.
"Doing these things well should not be negotiable. However, the condition of the property, the size and the floor plan can be changed along the way and as such, this is not as important. "
Could rentvesting be the ideal way to enter the real estate market? Profitability is a method of investment when a person buys a property in a place that he can afford to buy, which he rents to a tenant, while continuing to rent where she wants to live. Learn more about implementing this strategy for you.
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