The three most important things to look at when buying an investment property.

The three most important things to look at when buying an investment property. Starting off with the first point is long-term consistent capital growth. So you want your graph to look like this where it goes up, dips a little bit, goes up, dips a little bit and then continues to grow. This is very healthy. Parts of WA on the other hand, look a lot like this where it's dropped quite a lot and then boomed a lot as well. So there's no consistency there and it's hard to predict what the future's going to do based off something like this. The second most important thing is owner-occupier appeal. You want to be appealing to owners, not investors. So something like this that looks like a nice family home, rather than something like this which looks like a dingy investment. Now the reason why you want to appeal more to the owners is because one, owners typically will pay more than investors because they'll fall in love with the house, they'll fall in love with the location. Investors purely just look at numbers. If it doesn't make sense, they'll look elsewhere. Owners also hold onto properties typically longer than investors. So it creates a supply and demand issue. What that does is actually increase house prices within Sydney because you're putting more supply into the market. But it lowers the growth for the houses in that market. So it's buying in established locations and not outskirt locations because what happens with outskirt locations is they'll keep on building newer estates and what that does is actually increase supply in these outskirt areas, which lowers the growth for the houses in that market. Same goes as Newcastle where they're building all throughout here and out west as well. And same goes in Melbourne where they're building all to the east and out west as well. So just to recap, you want to look at consistent long-term capital growth. You want to appeal to the owner occupiers and not buy in investor-led markets. And also you have to look at the supply and demand within that market.