Property Investment – Hire a Property Manager or DIY?
Neighbourhoods are like brands. Their names conjure certain images. Some places have long been revered; Remuera, Fendalton, and Khandallah for example. They’re the Hermes of New Zealand real estate; long established, high quality, expensive - and, for many, unattainable.
So the question is, if you’re looking for an affordable investment property how do you spot the up-and-coming big brand suburbs, before they’ve up and come?
Diamond in the rough
Well, like cool brands, cool suburbs usually start out somewhat edgy. Nike, Diesel and even Apple rattled some establishment marketing cages before making it big. So too, Ponsonby and Grey Lynn were once labelled no-hope, blue-collar ghettos before the smart money started moving in. Now they are regularly the setting for news stories nationwide reporting on property sales prices.
Of course, identifying the smart money from the not-quite-as-smart money is the hard part. It seems there are two distinct groups of consumers/residents when it comes to successful brands/neighbourhoods. There are opinion formers, and opinion followers.
Who to follow
Opinion formers, and their migratory habits, are the key to spotting the next big thing. If you look at shabby-to-chic suburb success stories the world over, they tend to have two common characteristics. They have close proximity to their CBDs but have relatively low rental prices; ideal for artists, musicians, gallery owners and assorted creative types, big on ideas but short on cash.
These people are the fountainhead of opinion formers, and once the artistic community establishes a significant presence they attract other influencers; art directors, copywriters, photographers, PR people and the like, whose commercial image benefits from an association with new ideas and innovation.
The second tier of opinion formers are the brand experts; they make brands popular for a living. It’s their business to mould people’s opinions and make products desirable. And they can’t help doing the same with the places they live. They are enthusiasts and evangelise about their new neighbourhoods to anyone who will listen; they attract opinion followers.
Look at any metropolis in the world and you’ll see how many centrally located, down-at-heel neighbourhoods have become sought after real estate enclaves once the artists and bourgeois bohemians have taken root; Shoreditch and Brixton in London, Chelsea and Tribeca in New York, Ponsonby and Grey Lynn in Auckland.
So, watch out for art galleries springing up, or increasingly frequent poetry readings in previously written-off city fringe neighbourhoods. They could be tell-tale signs of the next real estate El Dorados.