Property Investment Guide: Urban Vs. Regional Areas

Location plays a crucial role when you buy an investment property. Ideally, you want an area with a large population and is situated near groceries, malls, and the central business district or where people usually work. All these might point to urban areas, but this isn't always the case. Your location of choice will also be affected by the type of market you're looking to attract.

In this article, we will fill you in on the differences between urban and regional areas. As with choosing between old and new properties, as well houses and units, each option has its own appeal depending on what your investment plan is.

Urban Area

An overwhelming number of Australians choose to live in cities, about 70% of the overall population. Thus, choosing an investment property in an urban area is a practical choice if you want to take advantage of the huge demand for properties here. Aside from that, the high demand also almost assures you of low vacancy rates, thus providing you with consistent income.

Of course there are downsides to this too. Properties in urban areas are negatively-geared for example. This might be a good choice if you're looking to lower your overall taxes, otherwise, it isn't.

Regional Area

When we speak of a regional area, you might imagine a vast wasteland where people won't think of settling. However, regional areas also present a good investment opportunity, so long as you are picky on where the property is located. Those that are near mines and energy projects are great places to get started. However, since the growth of the area is dependent on the growth of the industry to which it is tied, you need to be careful when making a choice.

Areas that are popular among holiday-goers are also ideal regional areas for property investment. The demand might not be high however, which can be exacerbated by the shifting economic climate. Unlike urban areas, though, regional areas are positively geared, translating to bigger income on your part.

But before you choose a property, make sure that you also couple it with the right home loan. Our qualified advisors at Rate Detective are ready to help you find one. They will put your needs and budget into consideration and provide you with rate comparisons of Australia's top lenders. This enables you to make a sound choice that's truly tailor-fit to your needs.

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Published on November 11-th, 2012 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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