You mean like the free Melbourne analsysis he did and shared a short while ago?
http://somersoft.com/forums/showthread.php?t=84115
http://somersoft.com/forums/showthread.php?t=84115
Growth - What do you look for when investing for CG?
- Thread starter Jake Milne
- Start date
Check out their websites, city councils, newspapers, chatting to locals & business's in area - networking generally looking to identify & further investigate areas where they are currently setting up shop or are planning to set up shop in the near future.
I hope this helps.
Many thanks Rick,
You monitor the council website for possible DA's? Do you find that the locals and other businesses become aware of these multi-nationals setting up prior to them 'turning the first sod'? Pounding the pavement is something I need to do a lot more of as part of my DD.....
Appreciate your advice here.
Its amazing what you can glean from chatting to locals/business's in areas.
State & Local Government website planning depts. Here's a killer link for you - enjoy!
The answer depends on your investment strategy... eg some people focus on buying big plots of land and consolidating them so what they would look for could be different to people who hold individual properties etc. Lately the focus has been on:
- Future government investment in to area;
- Future private investment in to area (more does not mean good though if people build rubbish);
- Recent performance of surrounding areas;
- Future demographic trends (ie more working class or more middle class?);
- How difficult it is to phase out the old demographics if they are undesirable;
- Accessibility to infrastructure (universities, hospitals, public transport);
- Proximity to employment or future employment;
- How tightly held the area is (some desirable areas have a lot of stock and prices don't move);
- Mortgage stress in area
- Actual desirability of the pocket within that area
- Future government investment in to area;
- Future private investment in to area (more does not mean good though if people build rubbish);
- Recent performance of surrounding areas;
- Future demographic trends (ie more working class or more middle class?);
- How difficult it is to phase out the old demographics if they are undesirable;
- Accessibility to infrastructure (universities, hospitals, public transport);
- Proximity to employment or future employment;
- How tightly held the area is (some desirable areas have a lot of stock and prices don't move);
- Mortgage stress in area
- Actual desirability of the pocket within that area
Interesting. I'm more of a supply and demand investor rather than land appreciator; what kind of land sizes are we talking about here INVSTOR?
What are your thoughts about land size vs. location?
You raise a good point arruga and the answer to your first question is yes, I am confident in my ability to achieve the best CG for clients as I operate within a very strong and rigorous purchasing model that has stood the test of time.
With that disclosed it's also important for my development to adhere to the philosophy "a rolling stone gathers no moss" and as such I constantly seek methods and opinions from all avenues, always.
I am very grateful for the knowledge that other professionals, investors and newbies bring to the table!
Thanks Chris,
It's quite a long process but the perhaps it's best to to say, start with a wide scope and zoom in.
I look at Australia > then State > then Region > City > Suburb > Street > Property and so on.
In the first instance zoom in by looking at 30 year median price growth, then 10 years and then 12 months. Then compare them with forecasts for 5 and 8 years.
Once the stand outs are shortlisted, whether they be exceptional long term growth suburbs, or huge spikes in the shorter term, or excellent predictions, then try to understand as much as possible about why that area has acted in the way the stats show.
It helps to look at the larger economic, demographic, and geographic issues first such as population growth, gdp production growth, gentrification, culture change, proximity to desirable geographic features etc...
Areas can be culled at this macro stage if they do not show promise...
Once the areas that aren't growing economically have been culled one can then compare the areas that are growing.
When the areas have been prioritized you can then work down into each suburb as they have their own micro situation too.
I think finding the right area is paramount, and then finding the best streets within that area comes second. Look for streets with good price growth history; look for streets that have views of waterfront, or desirable parks; that are close to shops and transport and that have a good feeling to them with house proud owners.
The last key selection is finding the best possible property that suits the demographic unique to that suburb. Different areas of Australia like different property types, just be sure to tailor your search to what the market wants.
My model currently looks at a narrow selection of properties within a short list of suburbs of which they suit; mainly in Melbourne's inner East and North, with but some exceptions. There are a few threads where my criteria has been mentioned
Hi Jake
I can not answer this, what I do know is once developers jump in the area improves significantly. Does it really matter, if there is strong demand prices will rise, from my experience developers target these areas.
Investors have the option to develop, which adds value.
I recently purchased a number of these properties, I am watching prices from when I started purchasing in Aug 2012 to Dec an increase of around $50k, developers are jumping in which is pushing prices up. Too many buyers and not enough stock, perfect storm.
MTR
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I think an undesirable area can still outperform even with reputation
The areas in mind - all part of The New North project - will probably take a further 10 years to become more mainstream but for the past 5 years have performed well.
Profit begets profit - the rezoning has provided profit for people redeveloping which has meant that people have sold up their crap (and moved away), developable blocks have increased in price, the new built houses have increased in price.
2yrs ago the blocks that MTR is now buying were about $270k now they are pushing $370k and moving upwards quickly. I think they are now too high but the number of houses for sale in Perth are alarmingly low.
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