How to spot a High-Growth Investment Property

How to spot a high-growth investment property (before anyone else does)

Investing in property can be one of the most powerful ways to build long-term wealth - but only if you buy smart. The key is to find a high-growth property before the area becomes popular and prices skyrocket. These are the homes that deliver strong capital appreciation over time, often because they're located in areas on the brink of transformation.

So, how do you identify a high-growth investment property before the rest of the market catches on? Lew Geffen Sotheby’s International Realty shares expert advice about what to look for - and what to avoid.

What Is a High-Growth Property?

A high-growth property is one that increases in value faster than the average market over time. This type of property is attractive for both capital appreciation and strong rental returns.

Growth can be driven by urban development and infrastructure upgrades, population shifts, lifestyle trends and increased demand in a once-overlooked area.

This doesn’t mean buying in the trendiest neighbourhood today - it means buying in the right place at the right time, ideally before demand drives prices up.

1. Look for Up-and-Coming Suburbs

Every city has them: those once-overlooked areas now gaining popularity due to affordability, location or lifestyle improvements. Think Woodstock in Cape Town, Maboneng in Joburg, or parts of Gqeberha seeing new development.

What to Look For:

• Proximity to established areas (often referred to as "spillover" suburbs)
• Renovations and new developments happening nearby
• Increasing property sales or rentals
• New cafés, markets, or co-working spaces (often signs of gentrification)

Red Flags:

• High vacancy rates
• Overdevelopment without infrastructure to support it
• Persistent safety issues without signs of improvement

Talk to local agents as they often know where the “next big thing” is before the stats reflect it.

2. Research Infrastructure and Development Plans

Public and private investment in infrastructure is one of the biggest indicators of future growth. Government upgrades and private developments (like shopping centres, transport hubs, or office parks) can drive demand and push up property values.

What to Investigate:

• Municipal spatial development plans (SDPs)
• Road or transport upgrades (e.g. new MyCiTi or Gautrain routes)
• Upcoming commercial or retail developments
• Expansion of utility services (fibre, electricity, sewage)

You can often find these details on local municipality websites or in town planning documents.

Red Flags:

• Delayed or cancelled projects
• Lack of basic services or aging infrastructure
• Areas prone to service delivery protests

Properties in good school zones and close to desirable amenities (parks, beaches or vibey restaurant precincts) tend to perform better over time, especially when it comes to attracting families or professionals as long-term tenants.

Ideal Proximity:

• Top-performing public or private schools
• Hospitals or medical centres
• Public transport access
• Shopping hubs and entertainment

If the suburb offers a balanced lifestyle - convenience, safety and community appeal - it’s more likely to attract upwardly mobile residents and grow in value.

4. Spot Value-Add Opportunities

Sometimes, the best investment isn't just in location - it’s in potential. A “fixer-upper” in a good area or a property with zoning for a second dwelling or flatlet can significantly increase in value after renovation or expansion.

What to Check:

• Is the property structurally sound but outdated?
• Is there potential to add a bedroom, garage, or garden flat?
• Are there zoning rights for subdivision or dual occupancy?

Caution:

• Get quotes before buying—renovation costs add up quickly
• Beware of illegal structures or unapproved plans
• Always inspect for hidden issues (damp, foundation cracks, roof damage)

When evaluating potential investment properties, use a consistent checklist to avoid emotional decisions. Below are examples of pertinent points to include:

• Located near a high-demand area but still affordable
• Upcoming transport or infrastructure development nearby
• In a reputable school zone or education hub
• Shows signs of gentrification (new shops, young buyers, renovations)
• Has room for improvement or development
• Close to major employers or business districts
• Strong rental demand and low vacancies
• Low crime statistics and improving area reputation

Once you’ve narrowed down the areas in which you’re interested, use property platforms (like Property24 or Private Property), Lightstone reports, or even FNB/ABSA property barometers to track:

• Median house price trends in the area
• Time on market (how long listings stay up)
• Rental yields and demand - a high-growth property is one that increases in value faster than the average market over time. This type of property is attractive for both capital appreciation and strong rental returns.
• Demographic shifts (young professionals, families, retirees)

Understanding the local market ensures you’re not overpaying and helps you project future returns.

7. Consult Local Experts

Talk to:

• Real estate agents who work in your target areas
• Local developers and planners
• Property investors on forums or Facebook groups
• Your bank’s home loan or investment division or a bond originator like ooba

Their insights can reveal things you won’t find in Google searches, like rezoning rumours or where bulk buyers are scooping up plots.

8. Red Flags to Avoid

Even if everything looks good on paper, beware of these deal-breakers:

• Properties with pending litigation or unclear ownership
• High body corporate levies in sectional title units
• Unusual pricing patterns (e.g. recent massive price drops)
• Overhyped areas that have already peaked in value

A well-chosen investment property doesn’t just pay for itself; it appreciates, creates equity and opens doors to future wealth-building opportunities.

Don’t fall in love with the first trendy suburb you see. Instead, dig deeper, do your research, and focus on location, potential, and data. The best investors spot opportunities early, while others are still chasing yesterday’s hotspots.

Your goal isn’t just to buy property - it’s to buy wisely, before the market catches on.