I am going to attempt to replicate Margaret Lomas investment strategy of buying in areas with good yields (5%+ at least) that have infrastructure projects on the horizon that are likely to bring some additional CG.
I have a few questions though:
- When you have a starting area of Australia, what is the best way to narrow the research down to a manageable list to begin with?
- How to identify the infrastructure projects that are likely deliver CG. For example is something as simple as a new train station good enough, or does one need to look for new casino/shipping port/airport/freeway.
- How do you go about finding the areas with these projects? (right now my source is Somersoft)
Rizzle
Quite a few of our properties have doubled/tripled in value over the course of a decade.. Rents on those have doubled & some close to tripled also.
I believe we have attained that growth because early on in our investment journey we decided to target / purchase in areas that had recently been approved for or were in the planning stages for gentrification.
We looked for the following 4 flag sectors injecting money. -
Government, Commercial, Retail & Private sectors
We discovered this ultimately uplifted & beautified the area resulting in people's attraction thus moving in and creating demand.
We have found this to work very well if you are looking for short to medium term capital growth so as to leverage against and build your portfolio faster.
Typically these are some of the signs we looked for where sectors were injecting money -
A/ Local/State/Federal Government. ie Major arterial roads, Govt Depts locating to area, Street Scrapping, New Public Transport, Recreational facilities, Hospitals/Medical facilities, Suburb Redevelopment Authorities being formed. etc
B/ Big Multi National Retail & Commercial type companies. ie Major Shopping Centres, McDonalds Hungry Jacks, KFC, Bunnings, Harvey Normans, Good Guys, etc. These companies spend $Millions on market research before going into and setting up shop in an area. If there was no current or immediate future demand for their products and services they would not be moving in, so leverage off the back of their research.
Sources for information as part of your due diligence - You can check out all the federal/state/local government planning & development websites at this one convenient link (
http://www.oultwood.com/localgov/countries/australia.php).
Other sources I use to gather info are from all the various big multi-national company websites, local newspapers, community news, local businesses, and people in the area.....general networking etc.
C/ Private People/Investors. ie Owner occupiers and Investors bowling over old houses then rebuilding new modern homes and redeveloping town houses / villas.
Get out and about. Jump in your car and drive around the area. Better still is once you're in your prospective area hit the streets by foot. You will see so much more on foot than by driving.
I hope this provides some food for thought.
