Property ‘hot spotting’ is the name that some property investment experts have given to the trend of hunting out the next investment ‘hot spot’ – that rapidly gentrifying suburb or mining town that’s, supposedly, just about to boom.
Not So Hot After All?
The term ‘hot spotting’ tends to have a slightly pejorative tone to it – turning the overenthusiastic claims about ‘the next property hot spot’ of so many headline writers and self-interested spruikers back upon themselves.
Those who are sceptical about hot spotting point out that it’s highly speculative – essentially a high-stakes gamble – and while a small number of people do make a lot of money off chasing trends, just as in any casino most of the punters end up worse off than when they started, or at best breaking even.
The trick to hot spotting is being ahead of the curve – get in too late and you’ll pay too much for too little. That sounds easy, but how do you know if you’re far enough ahead of the coming boom to make the profit that you expect to? It all depends on how big the boom turns out to be.
A safer option is to invest in areas with proven long-term capital growth, and to look for properties that are undervalued or where there is potential to add significant value through renovations or refurbishments. That’s a long-term investment strategy rather than a short-term money-spinner, but it’s also much more likely to yield solid results.
Property Investing in Perth
For more information on property investing in Perth and Sydney, contact Rass Global Investments.