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Reproduced with permission.
My last article outlined some useful websites for your online research. Over the next couple of weeks, I will be detailing the types of activities I undertake and the signs that I look for when attempting to select a suburb/area to invest in.
1. Drive/walk/ride around the streets
2. Check out the main street
3. Spend some time at the local shopping centre
4. Have a coffee/meal at a couple of local eateries
5. Visit the police station
This week, I consider the first two.
Drive/walk/ride the streets
I find that there is nothing better when researching areas to invest in than to actually visit the area and check it out for yourself. The first thing you should do is just go around the streets. Driving is quickest but walking and riding provide you with a better “feel” for the area as you can use your sense of hearing and smell to assist you with your information gathering. When driving, it is often just your sense of sight that you rely upon.
When moving around the area, have a close look at the people, the housing and the types of cars in the driveways. Also pay particular attention to the sounds you can hear and if there are any odours in the area.
• People – Are there many new shops with lots of young children around and well-dressed parents pushing prams or is it an area with graffiti, vandalised bus shelters and gangs of teenagers and young adults wandering the streets in the middle of the day. The first area mentioned has signs of a growing population with a healthy amount of discretionary spending whereas the latter has signs of an area in need.
• Housing – Is it an area where the gardens are neat, housing is well kept and owners are willing to spend money on major renovations or is it full of streets with car wrecks in front yards, no visible signs of house-proud ownership and many homes in a state of disrepair. I’d be considering investing my money in the first area mentioned.
• Cars – cars are a reflection of the people that live in the area. If there are plenty of utes and 4-wheel drives, there are probably many young men in the area. If the Ford Focus, Toyota Yaris and sporty Mazdas are the dominant vehicles, there could be many single women living here. Lots of large black BMWs, Audis and Lexus? This is a sign of wealth. Lots of small black BMWs and Audis? Indication of an upwardly mobile demographic with money to spend.
• Sounds – The loud noises to listen for include; aircraft – too close to the flight path/airport. Sirens/PA announcements? Too close to industry and factories. Can you hear semi-trailer and truck horns, trains? Too close to main roads and train lines.
• Smells – Can you smell sewerage? It could be that there is a sewerage treatment plant nearby or this area is downwind from the plant. Hot metal? Industry/factories are nearby. Rotting seaweed? Although it is beneficial to be close to the beach you don’t want to be in area which is renowned for seaweed being washed ashore, especially in the summer time.
Main Street
When going down the main street, focus on the number of “For Lease” signs and empty shops. If there are not many “For Lease” signs in shop windows and any empty shops look they have only recently been vacated, this is a sign that the local economy is doing well and people in the area have money and are willing to spend it.
However, if there are many empty shops, some look like they have been vacant for years, the street is littered with “For Lease” and/or “For Sale” signs, shop fronts look neglected and no-one is making an effort to give them a makeover, this is a worrying indicator. This could indicate that the area is in decline and should be one reason that you would avoid investing in the suburb.
Next time, we will look at three other activities you should undertake when inspecting an area to invest in.
Happy House Hunting!
Written by Peter Koulizos, university lecturer, author and buyers advocate.
