Finding population growth or decline and looking at the vacancy rates of an area can tell you a lot about whether or not that area is a good place to invest.
Welcome to the 30 Day Property Journey. Over the next 30 days I’m taking you through a bunch of different activities that you can do to become a more educated investor and hopefully a more successful investor as well.
Today we are talking about how to find out the population and the vacancy rates of an area. In yesterday’s episode we talked about some awesome things that you can find at the back of a property magazine. One of those things was vacancy rates. However, you do tend to find that the vacancy rates inside a magazine are quite old, 6-12 months old.
Being able to find up-to-date vacancy rates and being able to find population growth or decline is going to be very valuable when looking at an area. Rental demand and population growth and decline can be an indicating factor of whether your property (and the areas as a whole) is likely to grow or decline in value.
The first thing I want to do is look at vacancy rates in the area and how we find them.
I love this tool. I always recommend this tool to people. First accept the terms and conditions and then click the button that says “click here to see vacancy rates by suburb or postcode”
Then all you then need to do is type in the postcode of your area and it will show you the vacancy rates of the area over a period of approximately 3-5 years.
Population Growth And Decline
The next thing we need to do is to find out the population of an area and see if it’s growing or declining.
What we need to do is go to census quick stats. Click on 2011 from the drop down menu and then we just simply type in your suburb and select the correct options from the dropdown menu (UCL, SSC and SLA are the options I usually choose).
Make note of the population for 2011.
Click the back button and then choose 2006 from the drop down menu and do the same thing.
Make note of the population for 2006 and then cross check this with 2011 to see if the area has grown in population or declined.
Lastly, check 2001 just in case.
You should now be able to see the difference from 2006 to 2011 of your area and if the population growing in that area.
Population growth is always a good sign. It’s never a guarantee that you are you going to get capital growth in an area but if population is going backwards then that should be a red flag for you to consider.
Are lot of people moving out of the area and if so how’s that going to affect property prices?
If there are lots of properties in the area and less and less people in the area then there’s likely to be less demand for properties. The less demand there is generally means people have more choice and therefore they can bargain over price a lot more.
This often means you often can’t sell your property for as much and you don’t get the kind of growth you want.
It’s NOT it’s not a direct link. You can’t just say “well population is growing so the area is definitely going to go up in value” or “population has declined so it’s definitely going to go down” but it can show you a red flag and so you might want to do some more research into the area.
That is how you find a population and vacancy rates of an area and these are really great things to search for when looking into an area to understand exactly what’s happening in the area. You want to know whether your property is going to be rented and whether there’s going to be that demand there in the future.
Okay guys that ends today’s episode. If you want to see high rental yield properties and find out exactly where those positive cash flow properties are hiding. Go to On Property Plus and check out our membership options.
Until tomorrow stay positive.