4. History. What type of property will appreciate most over the long term, apartments or freestanding houses? What will the recent GST implementation do to home values? How will the First Home Owners scheme affect sales of the type of homes that are typically attractive to young buyers? To provide the best answers you should make extrapolations from the history of real estate profits. Getting the correct answer to these sorts of questions could win you the 'property investors bingo'. Baby boomers were only part of the 1980s property boom: the introduction of Capital Gains Tax, changes to negative gearing laws twice within the decade, and of course rising inflation and interest rates, sent sales prices through the roof. (But only in select areas; that 'position' again!) One historical trend that will come to your attention is the increasing move to density living. So a logical conclusion to follow might seem to be 'buy a flat'. The problem with this approach is that what will most actively appreciate to yield profits is the amount of land beneath your building. Well-positioned apartments (close to everything) are attractive to the professional investor because of historically superior rental returns. But as the occupier 'own home investor' this will not concern you so much, unless you plan to rent out your own home sometime in the future (say if you are young and mobile, wishing to travel overseas when you have saved enough). Buying an inner city modest house on a large well-positioned block has historically been one of the most lucrative long-term strategies. With urban renewal these sorts of properties become very attractive to apartment developers. (That is if you can stand to see your cottage knocked down in ten years time!) If however apartment living is the only lifestyle that suits you, as with houses, make sure you buy a quality 'position'. The unit overlooking the dull carpark, or worse the rubbish bins, is cheap for a reason. 5. Timing. 'When you buy' runs a close second to 'position'. It has been mentioned that buying your own home as an investment is less timing critical than professional property investment, but you still don't want to buy in a boom and sell in a slump. The easy way to insure against this is to avoid over hyped booming suburbs and to buy an area with strong position fundamentals. Perhaps the more relevant timing criteria for the owner occupier is: Do older homes make better resale profits than the 'freshly' built? Homes become dated. Yet that's not a bad thing for taking profits. Around the twenty to thirty year old mark (or as young as fifteen year old on some modern cheap constructions) the fit out of a home comes up for replacement. The plumbing , the hot water system the air-conditioning/heating and even the roof may well be at the end of their useful life. Conversely, just after a major overhaul when such mechanical systems have been replaced, is a great time to buy. The reason being that such structural repairs rarely add significantly to the home's resale value (a sad indictment of human focus on appearance over substance). But replacing such utilities sure can be expensive to finance yourself, so be careful not to buy just before their expiry date! Also to consider, from the investment point of view a second hand home can be a much safer bet because you know what you are getting in terms of the area. New estate areas and their just-new-homes don't have an established track record of appreciation with which to chart your future profits. Importantly, because these older homes were built on that thing they are not making anymore of, that is well positioned land, they are often the better investment pick. These areas have also had time to develop architectural charm in area diversity, a little bit of which is vital for resale profits. (Too much diversity however, where you have 50's houses rubbing against Victorian terraces in the same street, can dampen property values). Established areas can be ranked more reliably in terms of their conveniences of shops and transport, amenities, which will have to be present if you are to take good profits on resale. Lastly, that there is no GST may make these second hand homes a better investment bet than building a new home.