I feel I have a pretty good idea of the real estate market, being a real estate agent and all, and I have a couple of cap/growth based properties, I have read many investment books both positive cashflow based and cap/growth based. I agree with steve Mc Knight’s proven strategies and am very eager to implement them and just wanted to ask how everyone out there intially starts to look at a certain area or location, what are the first key tasks you do to hone in on a specific area, for instance, do you log on to ABS and look up population growth and projected growth rates, and then look at the area for price and cashflow comparisons to see if it is a feasable area to research further, any information in this respect will be much appreciated, Regards.
Ben Purdue
Hi Ben,
Try not to get too bogged down in analysis, I know people that have been analysing for the past 10 years while everyone else around them is making money. It’s not rocket science, I would start off by looking in the property section of the local paper and doing the maths on individual properties.Some areas have +ve cashlow straight off the bat, others, you have to think more creatively to get what you want.
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phone 0412 437 582I research the local market everyday, as I said I am a realestate agent, but living on the eastcoast line of nsw near sydney, this property is extremely expensive and it is extremely difficult to implement steve’s strategies. I also want to buy out of my state due to land tax implications. I prefer to keep the costs down and start off with smaller priced properties and accelerate the buying of these. I have been analysing the market for a while, mainly due to waiting for financial issues to be resolved, now that is all sorted, I am ready, but the areas I was interested in and have been watching & found great positive cashflow deals (commercial). I feel may be at the end of the road for c/growth, industry and population. I read a ABS report on Rockhampton & Mt Isa, and both of these regions have a declining population of 1200-1300 people P.A, Mt Isa only has 20,000 total population. The industry they concentrate on is mining and beef based, and I feel I might have already missed the boat on these locations and should start looking elsewhere, hence my question out of curiosity.
It alsomakes me wonder if I bought in these remote areas, they have been booming with growth rates of 20-40% and investors from southern states have been flocking to darwin, n/qld, etc to take advantage of affordability, when these markets they have been flocking to cool off and the southern markets become more affordable, does anyone see a likelihood of investors returning to the soutern states, hence demand up north subsiding and prices in the north falling back to more normal levels(meaning if I start buying up there now, is there a chance I am buying in the peak of their market? [blink]
More of a certainty than a chance. Better off sticking to Terrigal and running a ‘ring fence’ operation on a forced seller…[fear]
Regards, F.[cowboy2]
What do you mean by “a ring fence”? I’m not familiar with that terminoligy or phrase, I would probably know or have heard of the strategy you are talking about though, just might be called a different name.
Ben Purdue
Hi Ben,
Don’t rule out places like Mt Isa and Rockhampton. We have properties in both and they have served us very well, and the prospects for both those properties are looking very good at the moment, with tight vacancies and rents being pushed up in both places. The outlook for both towns in the immediate future is also pretty good, as the mining outlook is positive and Rocky is about much more than beef. Yes, they may not have the steady capital growth of Terrigal (just down the road from where I live!) and I think like most of the rest of Australia, they will plateau a bit pricewise for awhile but you’ll be putting much less in from your own pocket. Depends what your investment aims and personal situation are I guess.
How did I initially get in touch with these markets? My mother moved to Rocky a few years ago, and I couldn’t believe the house price vs rental return figure. Mt Isa kept popping up in my realestate.com alerts. From there it was a matter of looking at figures and talking to as many people as I could. While both populations fell for a number of years, there has been growth in the last couple (particularly Isa), which may not be reflected in the official figures yet.
Hope that helps. Good luck with it.
JennyThat is great news Jenny, well done. It is uncanny you live so close to my area. The Terrigal market is expensive and it has performed exceptionally well, I have built up plenty of equity. I am now looking for property that makes money from day one, my buying strategy will be positive cashflow based, also incorporating multiple aquisitions as repeatedly as my portfolio will allow(providing I find the market/area to focus most of my buying on), hense why I came to MtIsa & Rocky(for the yields). Thanks very much for your help everyone.[biggrin]
Ben Purdue
Hi,
I think the best research is done on the ground rather than on the internet.
By that I mean that it can be useful to look at postcode profiles to gain a basic understanding of an area, but beyond this the best research is done in person on the ground.
For example, recently Dave and I have begun investing in the US (little cheap houses that are high yielding). However, before we invested $1 we decided to go and have a look for ourselves as we knew that the house advertised on the internet may look good at first glance, but you can’t see the other houses around it nor gain a feel for the area.
Sure, later down the track you can form a system to buy property sight-unseen, but in the meantime be sure to invest time and money gaining an accurate feel for an area by pounding the pavements.
Thanks for your post and all the best with your investing!
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Can you claim your due diligence travel on your tax?
AXJ
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