To answer this question one must understand the purpose of the purchase.

If Buying Your First Home
When buying your own home, naturally the comfort of you and your family is more important than any other consideration. However by applying some wisdom to your selection you may be able to grow the equity in your home faster.

While the location will be determined by where you wish to live, it is best to take into account distance to main roads, schools, shopping centres and public transport. Properties in close proximity to such facilities tend to appreciate in value better.

As a general guide, most property experts recommend that you buy in close proximity to a major city (5-10 km). While this is good advise, if you have $300,000 to spend and require a 4 bedroom home, you will need to buy perhaps 15- 25 km out of town.

In choosing where to settle, have a look at the growth experienced by this suburb historically. Generally new settlements do not grow as well as established suburbs.

Also consider proposed infrastructure developments for the area. New freeways, roads, hospitals, universities etc – will bring more people into the area and contribute to increases in property prices.


If Buying Your First Investment Property

When buying your first investment property it is best to buy in areas close to where you live or at least in your own state/city. The reason for this is that you need to take some time to understand the local market and property values. It is easier to do this in your own city than interstate.

Some basic criteria to keep in mind for growth purposes is as follows:

• the greater the land component the better the potential growth;
• stay away from inner city apartments;
• go for units/town houses within 5-10km of city or houses within 15km;
• renovated property will produce a better rental result but will show less growth over time;
• do not purchase anything smaller than 50 square meters in size;
• stay away from company share titles;

If Buying a Subsequent Investment Property
At this point you can choose to be a little more adventurous. As you are not a novice at the property game, you may wish to consider a Commercial Property or look at a property that may be located interstate.

While you yourself may live in the metropolitan area of one of the major Australian cities, there may be a property boom going on in another state, town or holiday location. For example, the recent property boom in Perth has seen house values in that city grow by as much as 50% in one year while properties in Sydney were actually falling in value.

After you have acquired a number of properties somewhere close to home in a location which you intimately understand, it is reasonable to diversify to another geographical location or to a different type of property.

Commercial property (whether mixed zoning, retail, industrial or office) requires a greater deposit and more set up fees. However with such a property you can also enjoy a healthier return and a longer leases.