Good location of property is very critical for it’s success as a good investment potential. “Location, location, location,” is a common and almost hackneyed phrase in real estate literature. Mostly, “location” is repeated to emphasize that it is extremely important to the resale value of your home. Specially for an investment property which should attract potential tenants for lease and large number of potential future home buyers. A careful choice of location can minimize potential negative influences on future resale value, and maximize positive influences.
The selected property is in inner west Sydney suburb of Burwood. The unit is less than 200 m from the railway station and bus stops. Burwood is connected to Hornsby, Penrith and Liverpool line with frequent connections to city. Bus connects direct to airport and other inner west suburbs. Unit is less than 500m from Burwood Westfield which was redeveloped completely in 2000. Burwood plaza another shopping centre is only 200m away. MLC ,PLC, Trinity Grammar, Santa Sabina are some of the well known schools of Sydney are with in 10 minuter either by walk or car.
Primary schools and excellent day care facilities are within walking distance from the unit. Burwood has new Greater Union cinema complex and good quality cafes. The proposed property is in a 20 years old block of eleven units. It has been recently completely renovated by the current owner. New kitchen, bathroom and timber blinds were added to the unit only 12 months ago. Renovations are done in modern style with steel appliances and vogue light fittings. Property is a security building and have open common area. The proposed property is in commercial zoning with a few high rise residential developments around.
This block of units has potential to be redeveloped after 10 years into a high rise(7-8 storeys) block. It doesn’t have any significant building restriction for residential development at least. Rental prospects are one of the most important deciding factors in deciding about the residential investments. Burwood suburb is within 10km radius of Sydney CBD with less than 10 minute by train to city and within 20 minutes of other major centres like Parramatta, Hurstville, Homebush and Chatswood. There are two big corporate employers Telstra and EDS-Commonwealth bank in Burwood besides the Westfield shopping centre.
Burwood council is a densely populated council with population of 29,960 in 7. 26 square kilometres area1. It has an increase of 4. 8% since 1996 which is in line with increase with Sydney population growth. It has 69% of population in 15-64 years age group. Professional, intermediate sales personnel and associate professional are the top three occupations in the suburb2. Rented properties are on the top in list of type of occupancy in the suburb. The percentage of people born overseas is 47% and increasing in last 10 years.
This figure implies that this suburb is attractive to immigrants, who are the main source of population increase in Sydney. Looking at location advantages and the above mentioned statistics Burwood is an attractive suburb for renting for type of people living the area. There is high probability that with constant population growth this demand will remain in future. The current increase in the vacancy rates in Sydney of rental prospects is too important to ignore. According The Real Estate Institute of NSW(REINSW) the vacancy rates of Sydney were 4. 4% in May 20023.
With a few more of new unit developments under way in Burwood the vacancy rates might increase in the near future. Higher vacancy rates will marginally reduce the average rents in the area in the area. With the property growth is expected to slow down in next two years the demand will catch with supply at least in the rental market. Renters, particularly in the middle areas of Sydney, are benefiting from the city’s strong property market. Lower rents in the inner west suburbs will attract more tenants from outer suburbs because of less travel time and cost to city.