My Investments
Property:
• Eventually own a property portfolio worth more than $10 million dollars (today’s market)
• Property investment for wealth creation
• Long term strategy 20-30 years
• Retire by the age of 50-55
• Own dream home by the age of 40 ($3-4 million dollar home (today’s market))
• Low financial stress
• Buy and Hold Strategy
• Have a portfolio that is neutral-positive cash flow with the opportunity of capital gains
• Surround myself with trustworthy, reliable, knowledgeable and exceptional advisors. Eg. Buyer’s agents, real estate agents, mortgage broker, property manager, solicitor (Pam), accountant (Alan) ,surveyor, town planner (me), builder (Jamie), electrician (Neil and Jed), architect.
• Pay off first home loan ($270,000) within 5 years (2012-2017).
• Own a share in a holiday unit, beach house.
• Own a share in an unit/apartment in inner cities CBD (Brisbane)
• Use my town planning degree and career skills to develop my own properties
• Hold x property for 10-20 years and develop it
• Buy land within 15km of a major cities CBD and develop it into townhouses, units
• Invest in properties targeting a broad range of people in good areas (around the 300-600k mark)
• Look at a variety of investment property options such as renting fully furnished, dual occupancy, etc.
Shares:
• Invest money in shares through a financial planner through a trustworthy and savvy professional
• Through brother? Other Uni friends off to major banks?
Occupation Goals:
• Buy in to company such as current TP consultancy and start a Gold Coast Branch
• Possibility of starting my own town planning consultancy
• Build career up to a senior management position (Director, CEO, etc.)
My Investment Strategy:
- For the start of my property investing career I would like to buy and hold well located properties that are achieving 6%+ yields.
- Further on I would like to develop some properties, subdivisions, material change of use, duplexs, townhouses, block of units, renovations.
- Consider investing in commercial properties.
Emergency Funds
• Do not over extend myself in debt
• Keep 6 months’ rent cash for emergency funds for each investment property
REMEMBER:
- Live within my means, don’t be too greedy
- Don’t be afraid to leave the party while it is still going good
- Stick to what you know
- Money is not the most important thing
- Money does not make your rich
Due Diligence:
Places of information
For due dilligence, here's a start:
1. Web-sites:
a.
www.apm.com.au
b.
www.myrpdata.com.au
c.
www.realestate.com.au
d.
www.residex.com.au /
www.findmeahome.com.au
e.
www.homepriceguide.com.au
f.
www.domain.com.au
g.
www.propertyvalue.com.au
h.
http://www.lands.nsw.gov.au
i.
http://www.eac.com.au
j.
http://www.onthehouse.com.au
k.
www.htw.com.au
l.
www.sqmresearch.com.au
2. REI in the state
3. Lands Titles Office
4. Australian Bureau of Statistics
5. Local council
THIS IS WHERE IT GETS MESSY! HAH
Due Diligence - Criteria for Success – General Area:
• Supply and demand:
o What is the supply and demand for similar properties in the general area?
• Towns/cities with at least 15,000 people
o Does the Towns/cities have a population over 15,000 showing it is more established and banks prefer population over 15,000.
• Not 1 horse towns, variety of economic drivers
o Are there a number of economic drivers in the town? So that if one were to fail the town would not collapse? Eg. Town reliant on mining industry.
• Demographics
o What is the age structure of the people that live in the area?
• Population growth
o What are the recent statistics for population growth in the general Area?
• Economic growth
o What is the current and forecast economic growth for the area?
• Extrinsic growth – industry?
o Is the town being driven by an extrinsic factor such as a foreign country driving the production of coal? What would happen if this extrinsic factor stopped?
• Intrinsic growth – planned infrastructure?
o Are there a number of intrinsic factors driving the economic growth of an area?
• Household income
o What is the average household income for the General Area?
• New business
o How many new businesses have started in the last 12 months? Any plans for new business to start in the near future?
• Proximity to major cities/CBD?
o What is the proximity to the closest major city/CBD?
• Crime Rates
o What are the crime rates for the area compared to state and national statistics?
• Safety and feel
o How does the community feel about the area? Do they feel it Is a safe place?
• Low vacancy rates?
o What are the vacancy rates for the general area?
• Current infrastructure?
o What current infrastructure supports the area?
• Planned infrastructure?
o What are some of the planned infrastructure for the area in the near future?
• Rental demand
o What is the rental demand for the area?
• Transport infrastructure – accessibility, mobility, traffic, etc.
o How effectively are the current transport infrastructures servicing the community?
• Public transport – proximity to train, bus, cycle, etc.
o How effective is the public transport servicing the community?
• Climate
o What is the climate of the general area? Sub-tropical? Storm prone?
• High employment area
o Does the general area provide high employment opportunities? Which specific parts?
• Possibility of government incentives eg. NRAS, QLD building boost, etc.
o Are there any government incentives to invest in a property in this area? Eg. 2011 QLD 10k building boost
• Hospitals, medical centres, etc.
o Does the area offer good health services through hospitals, doctors, physios, dentists, etc.
• Schools, universities, TAFE and other education facilities.
o Does the area offer good educational services through universities, TAFE, vocational training and other educational facilities?
• Petrol stations
o Is the area serviced with local shops, service stations, news agents, etc.
• Theme parks, attractions, entertainment, bars, night clubs, taverns, restaurants, etc.
o Does the general area provide good entertainment such as Theme parks, attractions, entertainment, bars, night clubs, taverns, restaurants, etc.
• Immigration?
o What are the immigration levels for the area? Are there a number of overseas residents? Is it multi-cultural? Interstate migration?
Due Diligence - Criteria for Success – Specific Suburb:
• Supply and demand?
• Pedestrian access
• Speak to council about current projects, future projects and overall vision of the area
• Employment rate?
• Low maintenance building and grounds costs
• None or low body corporate, council fees, etc.
• Proximity to major shopping centres
• Plan and layout
• Does the property offer a lifestyle?
• Affordability to renter
• Is there a pleasant streetscape, view and aspect?
• Are there schools, shops, medical centres, cafes and restaurants nearby?
• What about beaches, parks and sporting facilities?
• How long does it take to get to work?
• What is the local community like?
• Is there car parking and public transport?
• Is there noise or pollution from traffic, aircraft or industry?
• Do you feel safe there after dark?
• Are you close to family and friends?
• Is there potential for better than average capital growth?
• Foxtel?
• Internet speed?
• Piped gas?
• Cash flow and depreciation benefits?
• Vacancy for suburb
• What is the condition of houses in the street?
• Amenities
• Infrastructure
• Other developments in same area
• Demographics
• Price Growth
• Constraints
• Research past sales history
• Research comparable s ales
• Research the neighbourhood
• Research current listings that are similar
• Find out what is coming next
• Locations of schools, shops, shopping centres, hospitals, parks & playgrounds, airports, libraries, medical centres, aged care facilities, places of worship
• Level of discounting from initially advertised selling prices
• . Population demographic:
a. Population size
b. Age stats
c. Family compositions
d. Type of dwelling
e. Nature of occupancy – owned / rented / purchasing
f. Transport to work
Due Diligence - Criteria for Success – Specific Property:
• Walkability catchments from property – 500m radius (5-10 minutes walking)
• Closest public transport, park
• Road access to property
• Does the property offer something unique?
• Size of land?
• Value ratio of house to land?
• Don’t overcapitalise on a property.
• High quality structure/ structurally sound
• Opportunity to add value
• Vacancy rates for specific property
• Aspect of property?
• Supply and demand?
• Property type?
• Return on investment Vs Risk level
• Building inspection
• Pest inspection
• Professional independent valuation
• Legal checks
• Estimate of renovation costs
• Estimate value/return once renovation completed
• Calculations on repayments, income, etc.
• Location within suburb
• Find out what the sellers current situation is
• Number of units in block?
• Strata title?
• Demolition control precinct?
• Heritage?
• Easements?
• Flood levels, bushfire and other constraints?
• Noise, air pollution?
• Easements and other council constraints?
• Off street parking- parking permits?
• Check for any previous applications to council on property and surrounding properties
• Physically visit property
• Visit at different times of day to get feel – day and night?
• Visit local shops, cafes, restaurant to ascertain service and quality
• Contact local resident, neighbour for their opinion of location
• Size and specification of property – comparison to surrounding supply
• Sales history on the individual property (if available)
2. Sales trends – i.e. prices trending up, down or sideways?
3. Days on the market to sale
4. Withdrawn from sale properties
5. Level of discounting from initially advertised selling prices
• Covenants / easements / zoning / flood affected? / proposed developments in the area / renovations undertaken
• . Methods of sale – auction or private treaty
9. Clearance rates on auctions
10. Vacancy rates
11. Median rental values
• Availability of public transport
13. Locations of schools, shops, shopping centres, hospitals, parks & playgrounds, airports, libraries, medical centres, aged care facilities, places of worship
14. Area sewered or unsewered? Natural Gas available? ADSL / wireless or cable internet available?
15. Town water / tank water / bore water available?
16. Heritage Listing
•
