Seven reasons to invest in inner-city real estate

By David Servi

1. First, and probably most important, it’s all about the money. In the long run, Sydney real estate never loses value. Sharemarkets crash – remember the GFC? Gold prices can mysteriously slide backwards and art can be tricky. But over the decades, Sydney real estate is unstoppable.

Remember how much the first house you ever lived in was bought for? The trend line might hiccup every now and then, but never for very long. Surry Hills, Redfern, Darlinghurst, Alexandria – its always onwards and upwards.

2. You can live in your investment. You can look after it yourself, get that wonky drainpipe fixed, paint that front fence, and get a carpenter in to adjust a sticky door. You can choose how much to spend on maintenance and repair, and you can do some of the grunt work yourself.

3. With a bit of research, some checking and some good advice, you can buy a home that won’t cause you any heartache; that you can let to tenants or not as your circumstances warrant, and that will appreciate nicely over the years and give you some solid financial peace of mind.

4. Sydney real estate can be lots of fun. Getting to know the market, sizing up the best streets, watching the sales statistics and reading the experts’ analysis, and then combining and all the pros and cons and making the big decision has kept lots of Sydney citizens happily occupied for years.

It’s hard to resist an open-for-inspection, even when you’re not in the market to buy, especially if it seems to be just the sort of place you might invest in some time down the track.

5. Your intimate local knowledge of your neighbourhood can be a real asset. You might know the owners in nearby streets who are considering selling to developers (who will knock down and rebuild with maximum noise and inconvenience to the neighbours).

You could know if the local council is planning to install parking meters in certain streets, or parking bays, or make streets one-way. You might hear the rumours about changes to public transport routes, or school catchment areas.

6. Interest rates have been at historic lows for months now. The Reserve Bank’s last adjustment to the cash rate (which determines commercial interest rates) was in August 2016, and that was a cut of .25 percentage points. But some experts think the days of ultra-low rates are numbered, and mortgage costs will start edging up some time soon.

7. People have been talking about the idea of renting for life, and noting that it is common in Britain and Europe. But there are levels of tenant protection in many nations, and getting tenants to move out can be almost impossible in Paris, for example.

Here, though, property-owners are only required to give tenants three months’ notice, if they decide they want to move back in or redevelop their home. It is no big deal to find a new flat and move when you are in your twenties, and mobile and happy to live in new suburbs. It can be much more onerous for older people, so it can be a good idea to invest in somewhere you can live for decades with no expectation of being moved on.