Some Properties Gain Value, Some Don't - Why?

When you buy an investment property the idea is for it to be a money maker, both month after month with rents, and in the long term with capital value.

But why do some properties take off and others don't? 

Not all properties act the same way, even if they are similar property types, such as a brand new 4-bed 2-bath single dwelling.  

Keep in mind this is not an exhaustive list of reasons for the lack of capital growth, but to illustrate just a couple of areas as to why not all properties act in same way.

Population growth

• Just because there is massive population growth in a certain area doesn't guarantee a low vacancy rate. If that population growth also coincides with an oversupply of property, it doesn't matter how many people are there, if there are too many properties they will not be filled.
• If you have town planners that are holding back on releasing more land for development and the area is a desirable place to live there will be an under supply of property, which of course will drive up the prices. 

Don't be fooled: population (doesn't always) = profit!

Shortcuts 

For developers to maximize their profits - due to rising labour and material costs - they often take a few shortcuts. These can include squeezing multiple houses onto a relatively small piece of land, which means each property only has a small slice or land. Or, to try and get that lucrative 4th bedroom sacrifices need to be made, such as the kitchen. Rather than the kitchen having it's own defined space, it's tagged onto the living area.

So if you have a new development with 4-bed dwellings, next to an older established neighborhood (with comparable properties), it is likely the older properties will have more land and more kitchen space (even if it's dated) and hence more value, perceived or otherwise.

How are the neighbours?

What's been happening to the neighbourhood recently?  Has the once thriving area started a downward slide? It can be just a matter of a few streets and it could make the difference in values increasing, stagnating or heading in reverse. 

Lets talk about schools

Do you think a property placed within the zone of a top ranking high school would generate more capital when compared to a property that is in the catchment area of a lower ranked school?  Schools are big business, and parents will go to great lengths to get their kids into certain schools, hence driving rents up in those areas.

So what have I missed? What are other areas that impact values of comparable dwellings?