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Capital Gains Potential in Future-Minded Real Estate Investments

Have you ever walked down the street and noticed the one as-of-yet undeveloped property on an otherwise immaculate street and thought “someone is sitting on a goldmine?”  Have you ever heard of someone who sold a house for a fortune that was purchased years ago for peanuts?  Most people hear of such ‘urban real estate miracles’ and think of it as pure dumb luck, but in actuality there are three key ingredients to hitting the real estate development jackpot: research, planning and patience.  With a little foresight it is possible to land a property in the middle of what will someday be the most happening part of town- without breaking the bank now.  Want to know what to look for when it comes to cities and suburbs?  Consider the following factors, separated into what to look for in an investment which will mature in around 5-10 years, and 10-15 years.

Real Estate Investments: In and Around the City Center

Real Estate InvestmentsToday it is next to impossible to land a bargain property in a city center unless either the property needs more work than it’s worth, or the property is in a ‘bad part of town.’  If looking for a property investment which experience large capital growth in 5-10 years’ will time it is imperative to seek out properties in areas which are already undergoing gentrification but are in the very beginning stages. The fact that other private investors are buying homes or refurbishing businesses in the area are great signs for growth.  If seeking a 10-15 year peak on a property’s worth do some research as to in which areas local government is planning to take initiative- perhaps by adding parks, cracking down on crime and vandalism, or implementing community projects.  Focus on areas with well-maintained character buildings which tend to become trendy as the influence of an already refurbished city center slowly spirals outward.

Real Estate Investments: Out in the ‘Burbs

Suburban sprawl will always stretch out around a city’s main downtown area, but once it has reached a certain distance independent growth begins to manifest itself.  As this happens further and further removed suburbs become destinations in and of themselves.  Many people still enjoy relative proximity to a city but are happy to commute a bit farther in exchange for the enjoyment and feeling they are in a separate community with its own subsistence amenities and its own community culture.  If looking for a property which will yield high capital gains within 5-10 years seek out an area which already has established shopping precincts, good public schools, and easy access to both road and public transportation, but where housing prices are still low because development is relatively new.  Recently built major shopping centers are excellent places to begin, searching in the immediate area for pockets where development is still relatively low.  If on a 10-15 year time line, it is wise to look for areas where future commercial developments are planned, but construction is still underway.  An area already becoming more gentrified will yield great return on investment in a shorter time, but seeing farther into the future and electing a suburb which articulates a suburb that has recently begun gentrification can widen the gap between purchase and selling prices-  with time.

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Sharon Freeman is a freelancer who loves researching and writing about Sydney Real Estate.  She also writes about buying, selling and renting real estate for companies like Taylors Real Estate.

Image courtesy of Hordur Vilhjalmsson / FreeDigitalPhotos.net

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