Real Estate Investor Magazine South Africa Real Estate Investor Magazine - November 2017 | Page 15

What to look for when deciding
Whether you decide to emigrate to a new country, invest
in property as a financial decision, or are looking to explore
different options, what exactly should you look out for?
Hamish Pound, Head of Investment at IP Global, outlines
the following points:
Population: A young, growing population is a key indica-
tor of demand, assuming those new people require housing.
If the number of houses being built in an area isn’t enough,
it’s generally good news for the investor. The existence of
this demand indicates that capital values of properties can
be expected to increase. It can also indicate long-term scar-
city of rental properties, pointing to the potential of rising
rents over time.
Employment/industry: Similarly to population growth,
if an area’s industry is booming and new jobs are being cre-
ated, particularly with employment sectors of the future i.e.
technology, digital media and medical research, there is a
high chance this will attract a working age population. A
diverse economy showcases a city’s strength and indicates
stable future growth as well.
Vacancy rate: Are empty properties few and far between?
Do properties for sale or for rent tend to be snapped up
quickly? It’s a good sign that both the sales and rental mar-
kets are on the up. Crucially, it’s also a sign that if one tenant
leaves, your potential investment property is unlikely to lie
empty for long: good news for ensuring a steady, predictable
stream of rental income.
Regeneration/infrastructure: In simple terms, this is
where a previously unloved area gets a new lease of life. Very
often, a local mayor or council takes the lead, actively en-
couraging new housing developments, retail, commercial,
cultural and leisure spaces. In terms of areas in a specific city,
these “new kids on the block” deserve special attention. The
investment case for areas under regeneration is often much
stronger than in more established areas. There’s often more
scope for capital value and rental income growth - while a
lower price point often makes them more accessible for in-
vestors, too. We’ve seen commercial and retail regeneration
change the face of many unpopular areas into thriving hubs,
and the investment case for these areas are often stronger
than in more established areas due to affordability and fu-
ture uplift.
Connectivity: Will there be improvements to public
transport links where the property is based? Are travel times
about to be slashed from your suburb of choice to the city
centre? Time and again across the globe, we see how im-
provements to transport infrastructure have a positive im-
pact on property prices.
Amenities and institutions: From big corporate offices
through to prestigious university campuses, an area’s ‘pull’
and character tends to be shaped by the institutions that are
present there.
Unique factors: What makes an area special is what many
investors ask. It might be that it’s making the most of its
industrial heritage. It could be that it’s reinvented itself as a
cultural hub. It might be the pull of waterside living that’s
proving irresistible to renters and buyers alike. Either way,
if the area’s a ‘go-to’ destination for a growing number of
residents, it’s definitely worth a closer look.
SOURCES
Business Insider, CS Global, Corpocrat, iProtect, Global Prop-
erty Guide, Business Day, IP Global, Sable International.
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SA Real Estate Investor Magazine NOVEMBER 2017
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