As with most investments, when investing in property there are a number of key elements that will set one investment apart from others, making it a ‘best investment opportunity’. These key elements or factors create an excellent picture of the property investment and its growth potential, allowing one to make educated future predictions.
At Carrick Property we always look at a number of such tried and trusted factors or key elements when considering the investment potential of a particular city, region, or area. Using these factors, we have identified outstanding property investment opportunities in cities like London, Manchester, Birmingham, Berlin, Leipzig, Lisbon and Porto, among others. Let’s briefly consider each one of these key elements.
We carefully consider the demographic profile of an area. A young, fast-growing population usually indicates a demand for housing. If that demand is not being met adequately through the building of new houses or apartments, it’s usually a good thing from an investment perspective. This keeps demand high, which usually leads to increases in the capital values of properties. And over time the relative scarcity of rental properties may generate excellent and increasing rental income for property owners.
The number of vacant properties and how long they remain empty, are always telling. If there are few vacant properties and those that are for sale or for rent are taken quickly, it’s a good sign for investors. It means that both the sales and rental markets are on an upward trajectory. It also tells us that you won’t struggle to find tenants for your property, which will assure you of an ongoing and predictable stream of rental income at a good rate.
Economy and jobs
If the economic activity of an area or city is booming and creating new jobs, this is likely to attract working age people, contributing to vibrant population growth. Particularly valuable from a property investment perspective, is if new jobs are being created in employment sectors of the future. These may include information technology, digital media, medical research, and other new technologies. Economic diversity is also important as it provides balance and strength coupled to stable future growth.
Infrastructure & connectivity
Investment in new infrastructure – especially in communication and transport infrastructure – in an area is also a good sign. It usually means that more investment in the area, increased economic activity and population growth will follow. As already mentioned, these are all good for property investments. There are many examples around the world where improved transport infrastructure and public transport links have had a positive impact on property markets.
Public amenities & services
The provision of the right mix of public amenities and services in an area will draw people there and underpin economic activity and population growth. In turn, this will drive up housing demand and property prices. These public amenities can range from sports facilities, parks and other public spaces, to public transport, libraries, art galleries, medical facilities, and more.
Corporates & industry sectors
Another good sign for investing in property in a particular area or city, is if corporates are increasingly establishing a presence there with new offices, plants, or headquarters. And if an area gains a reputation as a home for certain industry sectors, that’s another very good sign. Just think of what the IT industry and Silicon Valley did for San Francisco in California.
Leading or prestigious educational institutions always add to the positive character and pull of an area. Families want to live close to good schools. And a prestigious university or one that offers unique or highly specialised study opportunities will draw many students from abroad or other parts of the country. This will drive up the demand for rental accommodation as well as property prices.
Regeneration / renewal
Simply put, this occurs when previously unpopular Cinderella areas are given a new lease of life by redeveloping them and giving them a complete makeover. Often a business organisation will join forces with a local authority to redevelop an area. Or a new local government or mayor will make it a key project to do so, facilitating the building of new housing, retail, commercial and leisure spaces and facilities, as well as new infrastructure. Such regenerated areas often present a much stronger case for investment than more established areas as they provide more scope for growth in capital value and rental income. And with a lower price point, they can also be more accessible for investors.
For many investors, the key question is, what makes an area special? Why should I invest here compared to other comparable places? This is where an area’s unique features or character become important. These can range from its historical importance or having made the most of its industrial heritage, to having reinvented itself as a cultural hub or around waterfront living or being a green city. Whichever it is, it is that ‘something’ that makes it irresistible to renters and buyers alike.
Contact Carrick Property for more information
Carrick Property can help you to further explore the exciting possibilities and opportunities of Berlin’s property market, as well as others. To set up a meeting with one of our property investment specialists, contact us at [email protected].