In the world of strategic property purchases, it is not just suburb selection that can make the difference between an average and a superior performing asset.
Whether you are buying a property to live in or rent out, savvy property buyers always try to purchase dwellings that will appeal to owner occupiers and investors in the future.
Generally, these types of properties are what I call A-grade, because there is always strong demand from potential buyers, which underpins price growth.
A-grade properties outperform in their local markets by:
- Delivering higher capital growth
- Holding value better in downturns
- Always having plenty of would-be buyers
- Renting easier and achieving rental price growth over time.
During the recent economic turmoil – and historically as well – it has been A-grade properties that have generally performed best because their strong fundamentals continue to work in all market conditions.
This type of superior dwelling is also usually the one that sells under the hammer for hundreds of thousands of dollars above reserve because of the strong competition amongst buyers to become its new owner.
While there are some small variants depending on location specifics, these are some of common attributes of an A-grade property and an A grade location.
These are suburbs where there is always excess demand from buyers and often limited supply, plus its geography makes it even more desirable, such as near a river, harbour, or beach. Examples include riverside suburbs in Brisbane, leafy suburbs in Melbourne’s east and Sydney’s Lower North Shore.
A-grade locations are also highly walkable with a high street, village or parks with local residents having the option of enjoying the outdoors or spending time at a local café or restaurant. Despite having good access to local amenity, the property will be located in a whisper quiet location away from noise.
An A-grade property is often located in a quiet, flat, tree-lined street with little traffic, surrounded by similar high-quality homes. The street will be one of the locations that is on the wish-lists of buyers when discussing their dream places to own real estate.
Quality design (with scarcity)
There are a few variations on this depending on location, but quality design, especially design with scarcity is also one of the fundamentals of A-grade properties. It could be a period house with character charm, ornate features, high ceilings, commanding street appeal or bespoke architecture that makes it stand out from the crowd, whilst being located on a good-sized flat block of land with a nice yard or garden.
For apartments, it could be a unit within a small boutique block such as Art Deco
Aspect and orientation are vital to consider, depending on the location of the property. There should always be plenty of natural light beaming into the property. A Northern orientation is favourable to maximise light to either the home or the rear yard.
A-grade properties will always have superior or adaptable floor plans including generously sized bedrooms and sufficient living spaces. The design should be coherent with everything in its right place. A-grade properties will always make buyers go “wow” when they inspect it and never go, “what’s going on with that?” Open plan living spaces that connect to outdoor spaces are design elements that resonate with buyers.
High demand inclusions
These inclusions (which may be location specific) can add significant additional appeal to a property. This may be in the form of off- street parking, lock up garages, home office spaces, alfresco areas or swimming pools