What’s stopping you from investing in a property?

If you’re like many first-time investors, the upfront costs are the tripping point to getting started. The good news is that property investors can get started with whatever budget is available with plenty of entry-level investments to select from around Melbourne. Once the ball is rolling, you can build a portfolio that enables you to expand and step up to bigger and better properties as you build equity. It’s going to be easier for you to start investing in homes, which can grow your wealth in a stable way as the years go on. 

Residential property appreciates over time and allows you to build equity, giving you an additional income stream that can allow you to relax into retirement. 

The opportunity to buy is here because market conditions are now more favourable for investors. With housing prices dropping the market is shaping up nicely for investors. Over the next ten years, one in four Australian homes will be cheaper to buy than rent, according to projections by PropTrack, a property intelligence company.

Investing in residential property comes with valuable tax exemptions and benefits that can make it financially viable to keep your property up to date and earn higher rents, as well as bring some relief to those in higher income brackets.

As with all investments, there are benefits and risks involved so it’s essential to do your due diligence and assess which investment type matches your circumstances and financial goals. Once you fully understand the real estate investment process and know it’s right for you, you then need to carefully assess each property before signing on. 

The property location and the surroundings are both factors that can significantly impact your property value over time. It’s important to understand that your investment is not just land and building, but lifestyle, convenience, suburb potential and community.

5 suburbs that can give you more value for money when you buy a property 

There are multiple suburbs around the city of Melbourne that are priced well and primed for future growth. This is the sweet spot investors seek out to boost their chances of a bigger return on their investment down the line.

Here are our top five picks for suburbs with future value. As well as holding their own as suburbs with a lot to offer, each of the neighbourhoods listed below are within easy reach of Melbourne CBD, giving them extra flexibility and appeal both to renters and future buyers.

1. Yarraville

This quiet westside neighbourhood is vibrant, thriving and could be the location for your next property investment. Yarraville has everything that makes suburbs valuable: 

• Interesting culture
• Great community
• Diverse entertainment

Data from property sales in the area in the past 12 months preceding July 2022 in the area shows that the median property price for houses in Yarraville is $1,290,000. As an investment property, you can rent out a three-bedroom house in Yarraville for $550 per week and receive a rental yield of 2.5%. 

Rental yield refers to how much money you can make on your investment property, and this gives you a better idea of the ongoing return you will earn. You can also refer to this rate when the time comes to review the rent on your investment property.

Even as a relatively small suburb, it has an eclectic cross-section of food, drinks, activities and interesting landmarks. 

1. Seddon

This is one of Melbourne’s smallest suburbs, but don’t strike it from your list just yet. While the suburb has slowed in growth during the last quarter, Seddon has proven to have strong performance in long-term property appreciation. 

If you choose to invest in the area, rental prices will also see investors earning a higher rental income, with profits averaging at 7.47.% per annum from 2019-2021 due to an upward trend in home prices.

Seddon is home to residents from different age groups, welcoming a multigenerational locale vibe that is very relaxed and open to everyone taking it easy and going at their own pace.

1. West Footscray

West Footscray has always held a special place in our hearts so it’s no surprise to us to see this suburb emerging as the new player in Melbourne. Currently performing as well as (if not better than) her more well-known sister, Footscray, a starting investment or additional portfolio property in West Footscray opens up significantly more investment options. 

West Footscray is conveniently close to the city, just eight kilometres from Melbourne’s CBD, and only a casual walk from Footscray. The current medium house price is at $1,050,000, a rate that shows just how well this neighbourhood is on the up and up, with the potential to net investors rental returns at $475 per week.   

It’s also home to many unique experiences. A visit to one of the suburb’s restaurants on Barkly Street or gathering with members of the community at West Footscray Neighbourhood House will show a mix of vibrant, exciting atmospheres and laidback, relaxed living.

1. Maidstone

Located 8km from Melbourne CBD is Maidstone, a tranquil neighbourhood that experiences a healthy auction clearance rate and boasts a private golf club as well as a small industrial centre. 

There’s high competition for houses with buyer demand holding strong. Properties stay on the market for an average of 4 to 8 weeks and available homes are few.

Current median prices for property in Maidstone:

• Two-bedroom: $690,000
• Three-bedroom: $855,000
• Four-bedroom: $1,059,000

With a gross rental yield of 2.53%, real estate investors can earn a rental income of $430 based on the current suburb rental prices. 

1. Williamstown

Williamstown, or Willy as known by residents, is the first port settlement in Melbourne and it has a rich maritime history. It has the atmosphere of a small beachside town while still being conveniently near the city. 

Serviced by trains, road and ferry, there are plenty of ways to get to the city and lots of well-kept waterfront areas that make it picturesque and a bustling weekend market.

Williamstown is home to a swimming beach, parks and wetlands, bustling shopping strips on Douglas Parade, Ferguson Street and Nelson Place, plus a thriving restaurant scene. 

The Williamstown median house price is $1,630,000 based on 199 sales in the past 12 months preceding July 2022. 

Property investment is possible on a variety of budgets, and the key to a great investment is in choosing a property that has the potential to grow in the future. 

It’s a challenging task to narrow down a selection of more than 300 suburbs into a few options, considering what can get you the best value for your investment, and today’s market offers more opportunities to build equity. You’ll be able to find the right neighbourhood for you.

If you have questions about the best place for you to invest in a great Australian suburb, reach out to us. We’re happy to support you in making a decision.