Inner-city markets have long been perceived as an attractive option for property investors, however outer-city areas also offer some lucrative returns.

Major Australian inner-city’s suburbs have been popular for many investors, often due to their close proximity to… well, just about everything.

Despite this, there are still some unique advantages associated with the outer-city areas.

For instance, outer-city markets tend to offer a lower entry point than their inner-city counterparts. The upside to investing at a lower entry point with a more affordable property is that you may require a smaller loan and less debt overall and lower monthly repayments.

In addition, starting at a lower price point allows investors to enter the market with the option of adding further value through cost-effective renovations.

But it’s not only investors who benefit from these lower price points.

Affordable rental accommodation in outer- city suburbs may increase rental demand in these areas. As a result, vacancy rates remain relatively tight across most markets, leaving investors spoilt for choice when it comes to finding a suitable tenant*.

If you already have a few investments under your belt, with a majority of them in inner- city areas, then a property in the outer-city suburbs may be just what your portfolio needs.

Diversifying your property portfolio by investing in different suburbs and in different types of property can bring with it some significant advantages.

A diversified portfolio may lower any shortfalls you may encounter should a particular market collapse or if rental demand wanes.

It is important to treat your investment as a business and leave your emotions at the door. Keep in mind that you are not looking for your dream house; rather, a vehicle through which to create potential long-term wealth.

So, even if you’re not an outer-suburbs person yourself, don’t let that cloud your investment decisions.

Your investment strategy as well as your budget and what you can afford will dictate where and what type of properties you purchase.

If you would like help reviewing your current mortgage or need a hand securing finance for your next purchase, please feel free to contact us today.

Courtesy of Lending Services Victoria

Looking beyond the bright lights