There are myriad decisions to make when selecting your next investment property – but have you considered how big a difference choosing a waterfront position could make to your portfolio?
Blogger: Andrew Buxton, managing director, MAB Corporation
When it comes to selecting an investment property, investors have numerous decisions to make.
They must consider the property type, the size, architecture, location, price, weekly rent and vacancy rates – plus analyse which factors will generate the best returns over the short and long term.
However, there’s now an additional factor to include in one’s search criteria – a property on the waterfront.
Waterfront locations are high in demand as buyers and renters value both water views and the associated health and wellbeing benefits that come with living by the water. Additionally, as the supply of waterfront properties remain restricted, potential capital appreciation is far greater than properties inland.
With this in mind, here are my top three reasons why investing in a waterfront property is a wise decision, and more importantly, advice on securing such an asset for your portfolio.
Renters and buyers are partial to water views
Buyers and renters alike are favourable to a view of the water, according to recent data from Realestate.com.au. The data reveals that a water view is a top feature searched by buyers and renters in Victoria. Consequently, a property with a view will be in high demand by renters and buyers.
It’s also important to ensure that key rooms in a house such as living rooms, dining rooms and bedrooms, offer a view of the water – after all, these are the rooms that win buyers and renters over. Take for instance the boutique apartment development Banksia in NewQuay Melbourne. It will be constructed in a teardrop shape so that a majority of the living spaces have a view of Victoria Harbour. With 65 percent of Banksia sold in its opening weeks, its evident properties with water views have become a mandate for buyers.
Demand for the water’s edge
Research shows that a property on the water’s edge is on average worth more than those located inland. The reason for this comes down to the simple laws of economics. Properties which are genuinely on the water are few and far between. The exclusivity of waterfront properties often requires larger upfront capital, however the long-term capital appreciation will be far greater.
However, properties on the water are extremely rare, which means your search for an investment property might take some time. Therefore, ensure your finances are in order so you can make an offer the minute one hits the market.
Associated health and wellbeing benefits
Health and wellbeing has become a top priority for Australians in recent years, influencing how they commute to work, spend their leisure time and even where they choose to live. As such, renters and buyers are opting for properties by the water to facilitate a healthy lifestyle.
The reason for this is twofold. Firstly, research shows that living by the water has tangible benefits to one’s mental state, the theory being that water has a calming effect. Further research also shows that living by the water offers more fitness and recreation options.
This is because leisure facilities such as running tracks, bike tracks, paths and water sport activities are often located near water. As a result, a waterfront location has widespread appeal, attracting young fit professionals, health-conscious baby boomers or families who like to spend time outdoors.
If you’re considering adding a waterfront property to your portfolio, ensure you check the nearby sports and recreation amenities available so your property ticks all the boxes for both renters and buyers.
Andrew Buxton is the Co-Founder and Managing Director of privately owned property development company MAB Corporation in Melbourne, specialising in residential, retail, commercial and mixed-use projects. Its most recent project Banksia, a luxury boutique development on the water in Melbourne’s Docklands, heralds the transformation of one of Melbourne’s newest areas. By daring to imagine such visionary projects as NewQuay, Docklands and University Hill in Bundoora, MAB is playing a significant role in reshaping the environments in which we live, work and play.