A while back, Steve sent me the following email:

"Thank you for the signed copy of your new book! It was a fantastic read with some great info and I particularly liked the chapter about the next big property boom. My question relates to the NSW property market.

A few years ago I relocated from Sydney to Port Stephens, on the coast about 3 hours north of Sydney, fascinated by Bernard Salt's "The Big Shift" and the sea change phenomenon, and with my research showing good population growth for the area, I made the coastal town of Lemon Tree Passage my "comfort zone", combining Salt's ideas with your own style of investing; that is small developments held for the long term.

Postcode 2319 did very well during the last property boom, but then again, most places did well during the boom so sometimes I wonder if I've chosen the right location, especially when I hear the gurus say to always invest in the capital cities. Your comments about coastal property were encouraging, and on page 100 of your book you said "It's tempting to chase the latest trendy areas, such as the high-growth capital cities, but if you don't live there, look closer to home. There are bargains all around you."

Port Stephens has low rental yields at the moment (not unlike in the city) so it's not like I'm investing in a regional area for positive cash flow because the properties here are still negatively geared. I only invest for the capital growth.

Here is my dilemma.... do I stick with my original plan to buy and develop in my established comfort zone on the coast (in the hope its popularity with baby boomers / sea-changers will greatly boost property prices in the years to come) or do I focus on the Sydney property market where there is bound to be huge capital growth?

Do you have any comments or advice?"

Michael Yardney's response:

Thanks for the email Steve. There are opportunities everywhere and I cannot clearly say that Sydney will perform better than Lemon Tree Passage or the other way around.

So what should you do?

When choosing an area in which to invest, I generally prefer our major capital cities because of their strong population growth, but there will definitely be strong growth in selected coastal towns. In the last few years the growth in population in our major coastal regions grew 60% faster than the national average. Which means there should be some great property opportunities in your own back yard.

I believe property investors should each choose their patch, choose their "investment comfort zone" and get to know it like the back of their hands. Then take advantage of the opportunities there, wherever that patch is. Becuas ethere are opportunities in most major property markets.

In fact you should create your own opportunities - time your purchases well, buy below market value and add value - this way you will create your own capital growth. You create your own opportunities by:

Thinking like a developer

Buying like a developer and

Adding value like a developer.

I don't mean you have to actually become a property developer. You just require a different mindset.

Think like a developer - think "how can I add value and create my own capital growth?"

Buy like a developer - never pay retail - buy below market value.

Add value like a developer  - create your own equity by adding value through renovations, refurbishment or redevelopment.

Then DON'T SELL. Refinance your properties and take out your new equity to start all over again.

Click here for more details or call Metropole on 1300 20 30 30 to get a special report "How To Get Started in Property Development."