Alright all, time to practice some live research (via computer only) FOR MY FIRST INVESTMENT PROPERTY!.
All feedback and criticism is welcome and the purpose of this is to refine and identify a best practice approach to the way research is conducted.
1. Get pre-admin stuff sorted (pre-approval, budget, assets-liabilities = investing capital), identify strategy (I'm going to do a simple buy and hold strategy because it's all I kind of know and fits my circumstances as I am relatively young and have time on my side). Budget is critical so you know how much you can actually afford
2. Identify which state / suburbs within the budget (my budget is MAX 300k) and I'm currently looking in QLD in Brisbane given it has good yields, and the stage of it's cycle means there is still opportunity for buyers.
The way I identified suburbs was through: http://www.realestate.com.au/invest/house-in-brisbane+city,+qld+4000
Such a powerful tool as it utilises heatmaps and you can sort prices accordingly (logic is also involved, that the further you go out it's also cheaper)
3. Check growth, and stage of cycle (from my understanding the stage of a property clock is generally determined by it's growth trend so you can download your chosen suburb from http://www.residex.com.au/free-report)
the realestate invest site I linked above also is a good tool.
4. If the cycle is going down of the suburb it might not be good to invest in right now (BUT DEFINITELY A GOOD SIGN THAT IT IS A BUYER'S MARKET and you will have the negotiating power so it's not too bad), if it's flat, not too bad, if it's going up, meh, might have a few opportunities if you've networked with agents well. Property clock stuff was tricky for me to understand and I'm starting to understand it now after 6 months after viewing countless videos/reading stuffs
5. Cool, you have a suburb now, write down the critical stuff about it. I have been looking at Kippa-Ring, Redcliffe, Beenleigh and Eagleby.
My reasons are because Kippa-Ring and redcliffe are beachy suburbs (which australians love and generally have the priciest houses across Australia) close to the city and are reasonably cheap ( I believe because it's hard to access by people given lack of transport). Also there's like hardly any land left. PRICES WILL ONLY RISE IF DEMAND EXCEEDS SUPPLY! THAT"S HOW PRICING WORKS IN BASIC ECONOMICS. This rarity factor in the peninsula, structures it well for future capital growth (and it's getting a train station so that will help immensely - like in 2016).
Eagleby and Beenleigh because they're affordable, and numbers are good (and stage of cycle seems to be very good). But what concerns me is the potential for new estates to pop up in future and thus result in oversupply - but overall, strong yields, and cheap price range with low vacancy).
6. Go to the LGA website and read their plans and things.
Google information about macros and micro things about the suburb, this means population growth, gdp, employment. http://www.logan.qld.gov.au/__data/assets/pdf_file/0008/83699/Sections-1-5.pdf this for Beenleigh has so much goddamn information. Read it!
Read about supply factors for property, including stock on market (I don't read this generally), days on market, vacancy (THIS IS VERY IMPORTANT BECAUSE IF A PLACE HAS HIGH VACANCY, means more competition with rental accommodation). Vacancy stuff can be found from here www.boomapp.com.au and http://www.sqmresearch.com.au/vacancy.php?t=1
Generally <2% very good , 3% I think is alright (dunno never invested, just going off what I've read from investing information).
Boomapp.com.au is good to get all this info and get a DSR score (which utilises a couple of demand and supply factors to make a ratio up to 48 although always cross verify your sources and check other websites for the same metrics because sometimes they differ.
7. Identify what sells the most in the suburb (this is preparing for you exit strategy, as there is no point of buying the Taj Mahal in a town which sells huts as that is a niche, or unless it's your strategy for some reason).
THe way to do this is hop onto www.domain.com.au, go to the sold section and type in your suburb and look at solds. NOW ON THE SIDE YOU CAN FILTER THROUGH SOME STUFF LIKE BEDROOMS BATHROOMS ETC. once you click on it you will see that the filters have a number next to the identifier of the metric, meaning If you click property type (the black arrow) - taking BEENLEIGH as exampl- you will see next to "House" it says in grey (158), and once you filter to house and then click on bedrooms, you will see "3 (102)" Identifying that 3 bedder houses sell the most in the suburb.
8. Check your solds - this is where it can get tricky for me, compare like with like, a weatherboard house might not be the same value as a brick house, and I think this is what takes the most time. Here identifying best streets and good parts of the suburb will require either going to the suburb or talking to agents (I'm bad at this as I procrastinate and don't really know what to ask). Identify highest house price sold in recent months (god knows what range and always compare like with like, maybe check up to 12 months). Identify the high point, low point and median (someone please help with this step). Is this just the lowest price paid for a house in the last couple of months and/or highest?
Also how do you value property from street to street?
Is it just kind of, if there's a comparable next to it and you bring your IP up to same standards, the bank would value it the same? Is that the general jist of it?
I will list some properties which I think are good deals using this approach in a bit
All feedback and criticism is welcome and the purpose of this is to refine and identify a best practice approach to the way research is conducted.
1. Get pre-admin stuff sorted (pre-approval, budget, assets-liabilities = investing capital), identify strategy (I'm going to do a simple buy and hold strategy because it's all I kind of know and fits my circumstances as I am relatively young and have time on my side). Budget is critical so you know how much you can actually afford
2. Identify which state / suburbs within the budget (my budget is MAX 300k) and I'm currently looking in QLD in Brisbane given it has good yields, and the stage of it's cycle means there is still opportunity for buyers.
The way I identified suburbs was through: http://www.realestate.com.au/invest/house-in-brisbane+city,+qld+4000
Such a powerful tool as it utilises heatmaps and you can sort prices accordingly (logic is also involved, that the further you go out it's also cheaper)
3. Check growth, and stage of cycle (from my understanding the stage of a property clock is generally determined by it's growth trend so you can download your chosen suburb from http://www.residex.com.au/free-report)
the realestate invest site I linked above also is a good tool.
4. If the cycle is going down of the suburb it might not be good to invest in right now (BUT DEFINITELY A GOOD SIGN THAT IT IS A BUYER'S MARKET and you will have the negotiating power so it's not too bad), if it's flat, not too bad, if it's going up, meh, might have a few opportunities if you've networked with agents well. Property clock stuff was tricky for me to understand and I'm starting to understand it now after 6 months after viewing countless videos/reading stuffs
5. Cool, you have a suburb now, write down the critical stuff about it. I have been looking at Kippa-Ring, Redcliffe, Beenleigh and Eagleby.
My reasons are because Kippa-Ring and redcliffe are beachy suburbs (which australians love and generally have the priciest houses across Australia) close to the city and are reasonably cheap ( I believe because it's hard to access by people given lack of transport). Also there's like hardly any land left. PRICES WILL ONLY RISE IF DEMAND EXCEEDS SUPPLY! THAT"S HOW PRICING WORKS IN BASIC ECONOMICS. This rarity factor in the peninsula, structures it well for future capital growth (and it's getting a train station so that will help immensely - like in 2016).
Eagleby and Beenleigh because they're affordable, and numbers are good (and stage of cycle seems to be very good). But what concerns me is the potential for new estates to pop up in future and thus result in oversupply - but overall, strong yields, and cheap price range with low vacancy).
6. Go to the LGA website and read their plans and things.
Google information about macros and micro things about the suburb, this means population growth, gdp, employment. http://www.logan.qld.gov.au/__data/assets/pdf_file/0008/83699/Sections-1-5.pdf this for Beenleigh has so much goddamn information. Read it!
Read about supply factors for property, including stock on market (I don't read this generally), days on market, vacancy (THIS IS VERY IMPORTANT BECAUSE IF A PLACE HAS HIGH VACANCY, means more competition with rental accommodation). Vacancy stuff can be found from here www.boomapp.com.au and http://www.sqmresearch.com.au/vacancy.php?t=1
Generally <2% very good , 3% I think is alright (dunno never invested, just going off what I've read from investing information).
Boomapp.com.au is good to get all this info and get a DSR score (which utilises a couple of demand and supply factors to make a ratio up to 48 although always cross verify your sources and check other websites for the same metrics because sometimes they differ.
7. Identify what sells the most in the suburb (this is preparing for you exit strategy, as there is no point of buying the Taj Mahal in a town which sells huts as that is a niche, or unless it's your strategy for some reason).
THe way to do this is hop onto www.domain.com.au, go to the sold section and type in your suburb and look at solds. NOW ON THE SIDE YOU CAN FILTER THROUGH SOME STUFF LIKE BEDROOMS BATHROOMS ETC. once you click on it you will see that the filters have a number next to the identifier of the metric, meaning If you click property type (the black arrow) - taking BEENLEIGH as exampl- you will see next to "House" it says in grey (158), and once you filter to house and then click on bedrooms, you will see "3 (102)" Identifying that 3 bedder houses sell the most in the suburb.
8. Check your solds - this is where it can get tricky for me, compare like with like, a weatherboard house might not be the same value as a brick house, and I think this is what takes the most time. Here identifying best streets and good parts of the suburb will require either going to the suburb or talking to agents (I'm bad at this as I procrastinate and don't really know what to ask). Identify highest house price sold in recent months (god knows what range and always compare like with like, maybe check up to 12 months). Identify the high point, low point and median (someone please help with this step). Is this just the lowest price paid for a house in the last couple of months and/or highest?
Also how do you value property from street to street?
Is it just kind of, if there's a comparable next to it and you bring your IP up to same standards, the bank would value it the same? Is that the general jist of it?
I will list some properties which I think are good deals using this approach in a bit
