Babyboomers whose children have left home, commonly known as "empty-nesters" are buying inner city apartments in record numbers.

Director of Acton Special Projects, Marc Drexel says the trend is towards quality rather than mass developments.

"The empty-nest market is growing and expanding with people wanting to reward themselves with a quality lifestyle property".

Typically this group of buyers is seeking 2 big bedrooms, rather than 3 small ones with generous open plan living areas. These developments often include lifestyle features such as a gym, coffee shop, resident caretaker and even a rooftop library!

Drexel says Acton has 15 different developments under way at the moment worth in excess of $500 million with prices for individual apartments ranging from the low $200,000 mark to over a million dollars.

"The major inner city renewal has spurred the market on," he said.

With this growth many investors are also speculating by purchasing "off the plan". A 2.5 % depreciation against the structural cost of the building is an incentive and savings can be increased to between 5 and 10 % through discounts offered by the developer.

But Drexel also warns "be careful, selective and look for a point of difference, something unique such as location or architectural integrity so it stands out from other projects".

Drexel believes negative gearing is no longer popular with a new trend towards "neutral gearing".

This trend is supported by Trevor Hoddy a partner with West Perth accountants, HLB Mann Judd.

"We don't see at lot of negative gearing compared to five years ago and we're seeing more a move into managed funds, such as property trusts, where there is greater liquidity and less risk."

He says the reason for this is low inflation, generating poor capital growth and soft rental returns.

When considering investing into property consider these 10 Tips

1. Determine whether a property investment fits your financial goals, objectives and personal asset profile.
2. Look at the extent of your gearing (ratio of debt to equity or assets) compared to your other financial resources. If you are spending $300,000 - $400,000 on a property - how big is your debt? How much risk is there compared to your other financial assets?
3. Look at what income your asset will need to generate to service the debt.
4. Determine if there any shortfalls between the income generated and the cost of servicing the loan. With negative gearing the shortfall between the income generated and the interest costs on borrowing and the maintenance costs on the asset are serviced from other income sources. You need to look at whether you have the resources from other income, either investments or salary, to maintain or pickup this difference. The benefits of negative gearing are that this shortfall can be offset against other income, reducing tax liabilities.
5. Assume the property is vacant. What impact will this have on your cash flow?
6. If you've borrowed money now at 9 or 10 %, what happens if this increases by 1 or 2 %? With an increase in interest rates do you have the ability to service this extra cost?
7. Negative gearing into investments is only effective if the long-term investment is linked to income and capital growth (the growth in the value of the asset). This is influenced by a combination of inflation and net after tax benefits. For example a $20,000 negatively geared tax deduction will yield a $10,000 tax benefit. This is the real cost, so each year the value of the investment must increase by this amount plus inflation. There is also a capital gain tax is on top of this. If growth is less than inflation then you're going backwards.
8. Ask yourself are you comfortable with the level of debt? Consider whether this matches your psychological risk profile.
9. How liquid is your investment? Put simply, how soon can you turn your investment into cash? Often property may take some time to sell and a more liquid option is to invest in listed or unlisted property trusts.
10. Have a solid financial plan and seek the help of an expert or a registered financial planner.