House hunting for an investment property can be exciting, but it can sometimes be overwhelming.  

When looking to invest in the property market, there are a lot of things to consider.  

Searching for up-and-coming neighbourhoods and high growth suburbs might seem tricky, but these pointers could help you identify which properties are more likely to increase in value. 

- Related: [6 crucial things to look for in an investment property unit](https://www.lendi.com.au/inspire/property/6-crucial-things-to-look-for-in-an-investment-property-unit/)
- Related: [What increase the value of your home? ](https://www.lendi.com.au/inspire/insights/what-increases-the-value-of-property-australians-weigh-in/)
- Related: [How much is my house worth?](https://www.lendi.com.au/inspire/property/how-much-is-my-house-worth/)
- Related: [Investing 101 - 11 Things to know](https://www.lendi.com.au/inspire/finance/investing-101-know-before-investing-in-property/)

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## 1. Days on Market (DOM) are trending low

One of the easiest ways to tell if a neighbourhood is a high growth suburb is by looking at the time it takes to sell a property. 
The DOM of any property can tell you exactly whether the area is sought after or not. 

If a property takes more than sixty days  or so to sell, there tends to be  a reason why buyers are not considering that particular property. 

If a property’s DOM is only around 3-4 weeks, chances are, it was attracting buyers. 

Generally speaking, if a neighbourhood’s property market is desirable, and houses are selling fast, it might be worth looking into purchasing a home of your own there. 

Most buyers tend to consider 21-30 days as an optimum number of days on the market.

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## 2. There are new buildings and renovations 

While the sound of jackhammers and drills can be deterring, it’s important to remember that signs of renovation could indicate a property growth area.

Renovations in a neighbourhood signal that it is continually updating itself to appeal to the newer standards and interests of home buyers and investors. 

The modernisation of buildings attracts people, it means that the future of a neighbourhood doesn’t look bleak, but successful. 

While the sounds of a renovation or construction site may be unappealing, it’s a minor short-term inconvenience when compared to the return and desirability the finished product could yield. 

Keeping an eye out for new constructions and renovations is a sign that the neighbourhood is moving to greater things and may be the best and most ideal market you’re looking to invest in. 

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## 3. Rental prices are going up 

Searching for an investment property suburb? One important factor to look into is rental yield. 

The rental yield of a property indicates the willingness of tenants to live there. It’s an obvious way to tell if a neighbourhood is rising in popularity, is whether or not its rental prices are increasing.

Ideally, you’d want rental prices to rise and not remain stagnant. This indicates that properties in these areas are highly sought after and homebuyers are willing to pay steeper prices for a home in a desirable location. 

If the selling price of a property has increased after resale, or if its rent has steadily increased over time, chances are, the property itself is now more marketable. 

If you find that this is the case for multiple properties in a single neighbourhood, you’ve found yourself an up and coming suburb. 

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## 4. There are lower vacancy rates

A primary concern for property investors is that their properties could remain vacant for long periods and therefore not earn them rent to their full potential. 
To counter this issue, it makes sense to look for properties in areas that tend to have low vacancy rates.

High vacancy rates imply that those neighbourhoods aren’t as desirable by home seekers and would therefore make it harder to get decent rent or sell off the property when the time comes. 

If a neighbourhood tends to have lower vacancy rates than others, this is an indication that it is an up and coming suburb. 

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## 5. There are good schools in the area

Finding a property near a school or in a school-catchment area is important for families who want to prioritise their child’s education. These sought-after areas call for a competitive market. 

Parents are prepared to pay higher property prices and higher council rates for the privilege of being within a certain distance of a school. 

As an investor, properties in school catchment areas are becoming increasingly popular for a variety of reasons, including: 

- Functionality 
- Safety  
- Sense of community for children 
- Preference given to residents under the school zone system  
- Overall value of the investment. 

Reputable schools nearby are likely to generate an increase in home buyers and rental tenants because of a property’s prime location. 

Investors can charge higher rents, on account of the property location being desirable and creating greater demand. 

Homes near schools tend to hold, if not increase their value over time because even in turbulent market conditions, aspiring homeowners tend to value homes closer to schools much higher.

Higher property prices due to high demand and limited supply, combined with a higher rental yield, ensures that an investor retains their initial investment while also earning a profit in terms of increased property value.

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## 6. There's a young, artsy demographic
Younger generations, specifically ‘millennials’, are leaving their mark on the property market. Generally speaking, suburbs with higher amounts of younger residents tend to see ripple effect and a spike in property prices as well as rent. This is because, along with newer demographics and interests, comes an array of amenities in the area, that are considered essential. 

This could include greater accessibility to art galleries, live music events or a buzzing nightlife. 

These kinds of areas are becoming increasingly popular among home buyers and investors. Cultural hotspots attract various people when house hunting. 

It’s also worth noting that a younger demographic who consists of creatives and graduates are more likely to use their skill sets and abilities to add character to a neighbourhood and make it more inviting and welcoming. 

Since potential homeowners tend to prefer living with like-minded individuals, they may value property in a neighbourhood with younger residents higher. 

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## 7. There are successful businesses in the area

Up and coming neighbourhoods tend to be the homes of independent businesses that are successful. 

Whether it be a jewellery boutique, a clothing store or the hottest brunch spot in town, the popularity it receives is a great indicator of how well the suburb is doing as a whole. 

If businesses in the area are seeing higher success rates, it’s probable that the neighbourhood is also profiting from these gains. 

Popular stores not only cater to those who live nearby but attract people and residents from other neighbourhoods. 

Just as some families look for reputable schools in a neighbourhood when looking for a home, potential rental tenants might look for a buzzing cafe nearby that offers good music and good coffee. 

Availability of important amenities like schools, public parks, bars, supermarkets in close proximity of a property also tends to affect its value over time. 

It makes sense to invest in such properties because they attract interest from a wider range of people and command higher rents.

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## 8. Public transport is easily accessible

Up and coming neighbourhoods usually have easy access to public transport. 

Whether it be bus, train or ferry, potential rental tenants and homebuyers look for easier and cheaper ways to commute around cities. 

Residents look for frequent train and bus line timetables to head to central locations for work or school. If a suburb seems isolated, property values within it could decline. 

Inadequate public transport services leave neighbourhoods at a disadvantage. 

Infrastructure Australia’s October 2018 report on Public Transport assessed the liveability of suburbs across Australia that lack access to public transport. The report shows that a substantial amount of potential homeowners consider the commute time to important locations when house hunting.

Bus stops and train stations that are within walking distance are agreeable for home buyers. 

‘30 minute neighbourhoods’ are becoming increasingly desirable, as they promise easier commutes to central locations. 

Fast and reliable public transport renders a neighbourhood up and coming. 

It can be useful to consider the money you could save on petrol and other car additives, by searching for a home with easy access to a bus stop or train station.

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Keep all these things in mind when house hunting. An up and coming neighbourhood has the potential to provide you with a higher rental return if you’re looking to invest.

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*The information in this post is general in nature and should not be considered personal or financial advice. 
You should always seek professional advice or assistance before making any financial decisions.*

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