Common Mistakes People Make When Selecting A Suburb – 6 Ways To Avoid Choosing A Property In The Wrong Area

Common Mistakes People Make When Selecting A Suburb – 6 Ways To Avoid Choosing A Property In The Wrong Area

With so much information out there, and so many suburbs to choose from, where do you start and how do you choose the right suburb to meet your investment needs?

In todays article we look at 6 common mistakes people make when selecting a suburb and doing their research into an area for a new investment:

Looking to buy an investment property in the next 12 months? Learn more about how we can help you here…

Looking for a “Hot Spot”

The problem with buying in the latest “hot” spot is the suburb has already boomed.

When collecting your suburb data you need to be wary of the research you’re doing.

You want to be at the potential for future growth in the suburb and the future potential of the property.

It’s important to avoid targeting areas that have grown dramatically in the past 1 – 5 years, as these suburbs may have already achieved their growth potential.

Information Hoarders

Have you ever heard of the saying information overload?

Do you know people at work who are obsessed with information but never actually do anything with it?

There are a lot of people out there offering advice on different ways to invest.

Some say you should be looking for cash flow positive properties while others say you should be buying for capital growth? Should you build a brand new property or sub-divide an existing block? Is there potential for secondary dwelling? Should you invest in an apartment?

With so much conflicting information out there investing in property can be overwhelming.

The key is to not get distracted by the white noise out there, and only collect information that is going to be helpful to YOU and your INVESTMENT NEEDS.

When it comes to collecting information for suburb analysis, you need to try and narrow down what is important to you, and only find information that is relevant to those goals.

Not Understanding the Data You’ve Collected

Another common mistake that people make when selecting a suburb is they don’t understand what data to collect or how to interpret it.

Having information you don’t understand is almost as useless as having no information at all. It is important you use the right tools to make sense of all the suburb data you are collecting.

For Example:

It’s all well and good to know that you need to look at vacancy rate and rental yield data, but you need to know why this information is important to you as an investor.

Take a look at an article we recently wrote here titled 15 Free Online Tools To Improve Your Property Investment Research.

Not Comparing A Number Of Markets

It is vital when collecting suburb data that you compare multiple markets. A common mistake people make is they become emotionally attached to a suburb and want to find their dream investment in that one particular area.

The difference between buying an investment property and buying a property you’re going to live in, is the numbers.

To ensure you take the risk out of investing in a dud suburb, you need to compare markets. Look at the performance of surrounding suburbs, and trends in other capital cities for similar areas. For example, if you were interested in investing in Wynnum West in Brisbane, it would be a smart idea to compare suburbs less than 15 kilometers from a capital city, and less than 5 kilometres from the ocean, in other states. You also need to compare the suburb with surrounding areas and look at the past performance of nearby housing markets.

 Too Risk Adverse

Unfortunately some investors can be their own worst enemy and use one red flag as an excuse to not move forward with an investment.

Being risk adverse is a great character trait in a property investor, however, being too fearful will leave you regretting poor decisions and missing out on amazing opportunities.

People Who Want It All

On the opposite end of the spectrum to the risk adverse investor, is the greedy investor. There are a lot of people who want it all, they want the 10% rental yield, with the 20% capital growth, in the suburb with the best school and the potential to subdivide in the future.

We are not saying numbers like these can’t be achieved, but from our experiences if it sounds to good to be true it generally is.

By doing relevant suburb analysis, and combining that research with the goals you hope to achieve from your investment property, you will find the right data & information you need to make the right decision.

It is important to do comprehensive suburb analysis, and ensure that the analysis matches up with your needs. Use the right tools and collect information from suitable sources and you will avoid making the 6 common mistakes investors make.


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Ben Everingham


Ben founded Pumped On Property after building a multi-million dollar property portfolio over a 5 year period. His mission is to show you how to replace your income through property investing so you can do what you love…full time.