An investment idea

Hi Guys,

I had an idea, and I thought maybe someone could tell me if its a good one or complete crap.

I was thinking if you could base an areas potential on what reatail stores are doing?

For eg. If bunnings in sunshine is doing better than bunnings in WaterGardens, could that mean more people are wanting to live in Watergardens?

So in other words, could you use retail shops to follow trends in rental areas?

I hope this makes sense.

Thanks
 
So in other words, could you use retail shops to follow trends in rental areas?


I'd say yes. If you take Bunnings for example. They don't do so well in high rental areas. However, fast take aways do.


I've found that if you see an area with McDonalds, KFC, Pizza Hut, Video Ezy etc, ect, combined with lots of realestate offices. You can bet your life there's a very high percentage of rentals compared to PPOR.


If your after a high yeilding properties, these are the areas to target.
 
Nice train of thought !!!

But this way you can only judge the current market trend !! what about the future ...lets say I want to buy in an area which I hope will pick up in next 5 years and provide high rentals yield but doesn't fit with this formula at the moment..how wud u judge that then ??

अमन
 
Nice train of thought !!!

But this way you can only judge the current market trend !! what about the future ...lets say I want to buy in an area which I hope will pick up in next 5 years and provide high rentals yield but doesn't fit with this formula at the moment..how wud u judge that then ??

अमन

Look for areas that are about to undergo the above-mentioned developments.

This is a pretty good sign that things are starting to move in that area.

As a general rule, areas that have good amenities, good transport systems (trains, buses, freeways etc), parks, shopping, schools hospital, beach and so on are where you want to look.

A glorious house on 5 acres out in the rolling hills would struggle to get a lot of tenants - vacancy would be a problem probably.

If they start to throw in a few KFC's, Maccas and Pokie venues into those better amenity areas - you know you are on a "renter" winner, but probably your lower socio-economic demographic.

For your better-heeled tenants you need to look at areas that are being "gentrified and near cafe strips and restaurants etc.

Older areas (especially with period homes) that are undergoing a lot of house renovations and extensions is a good sign that the younger professional types on good incomes are moving in. This is a good cap growth sign, but may mean a small pool of renters.
 
I had an idea, and I thought maybe someone could tell me if its a good one or complete crap.

I was thinking if you could base an areas potential on what reatail stores are doing?
It's a great idea, which is why it's a well-known strategy. ;) So well done on coming to this conclusion independently. :)

There are plenty of investors who choose when to invest in new areas based on when Bunnings/Maccas/Coles (or whoever) decide to open a store in the area; it's a way of taking advantage of that large company's extensive demographic research. In established areas, there are investors who look at factors such as the number of take-away stores, the number of retail vacancies (ie low!), the presence/absence of discount stores, etc.

There are plenty of data available from a huge variety of sources, which could be useful for helping you identify trends a bit earlier than the average Joe, ie areas which are becoming more popular to live in, and thus get in before prices take off.
 
Hey guys,

I'm stoked to hear that one of my ideas is acutally good!

So ozperp, where can you find out where a new maccas is going up (for example), and the number of rental vacancies? or is it a secret?

Thanks for the replies guys :)
 
Be careful with this approach......it definitely can not be applied to Hervey Bay (which should be renamed 'Bogan-ville') in Qld.

The place is flooded with rental properties; both appartments and house & land. Rental rates are very poor, resale values are falling with no sign of increasing in next few years.....there is a massive glut of property across the board here. A lot of it is burbs style spec houses on standard blocks.

We have Maccas, KFC, HJs and all those staple bogan eateries.....I frequent all of them myself.......and I am a loud and proud bogan.

Yet another apartment complex owner....the highly spruiked Bayswater Group owners of Peppers on the esplanade has gone into receivership last week still with heaps of apartments they can't move.....and they are not alone. The developers are falling like flies here. I gladly live in Hervey Bay but there is no way known i'll invest here!!!

No matter what you read or here from all the pundits (especially Bernard Salt who seems to have a love affair with all his stats on the place) be very wary of investing in Hervey Bay. A lot of no hopers and unemployed from metro Brisbane and other areas are coming into town and although trouble is not in your face, I think it is only just around the corner.

If investing in low socio economic areas is your thing......then good luck!

Cheers,

Ian.
 
Top