“Hot Spotting” is a term that generally describes, investors trying to buy into the next big “boom” location- but is this genuine property investment?

Investing in property is about generating strong long term capital growth that hopefully, tracks above, the average price growth for the area.

To be successful, investors need to do their due diligence and research locations, that have a proven track record of outperforming property value averages. Also, investors need to have a clearly defined investment plan, that outlines their goals and intentions.

“Hot Spotting” is the complete opposite to the tried and tested method of Property Investment, as it is much more about speculation, than long term wealth creation.

One of the main keys to building a portfolio is to buy your first property to leverage into your next property, in areas that have a history of delivering long term above average growth, and then use those two investments, to leverage into more investments.

“Hot Spots” tend to be areas that “heat up” just as quickly as they cool and more often than not, require you to follow the crowd.

Seasoned investors understand that it is smarter to buy, when everyone else is afraid to get into the market.

Following the trends can sometimes mean that you will end up paying too much, especially if there is a buying frenzy in a “Hot Spot” location, in an over-inflated market.

It is too easy to overcapitalise, if you invest somewhere that becomes a “Hot Spot” overnight and everyone is in a buying frenzy.

‘Hot Spotting’ can be lucrative, but it requires precise timing that most investors don’t necessarily possess.

Inner suburbs on the verge of gentrification, have excellent potential to generate growth over the long term, especially if they still have an aspect if industrialism.

“Hot Spotting” can also cause short term inflation, in suburbs that can’t necessarily sustain high levels of long term price growth, just look at all the mining towns, which were yesterday’s hotspots and where investors are now having issues offloading their properties.

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