I have started looking in an area in which there are loads of new flats getting built. I know from my research that there is expected to be an increasing population and that the population there is expected to be mostly single/couple looking for small places/apartments. There is currently undersupply would be my estimate.
But I can't determine between whether I think all these new flats mean that the market is confident and I should join in or whether I will suffer with my future tenant/s in an older flat while the market is being flooded.
What are your thoughts/how would you go about reaching a conclusion/what can I research to help me come to a conclusion?
Personally I prefer to operate in a known market rather than one I hope will eventuate.
Some of the things you can do to understand demand are:
For rentals:
Talk to as many property managers in the area as possible, asking what types of dwellings are in most demand, how long they take to rent out, and what locations are more popular and why. Monitor the for rent pages on the real estate websites. Note down the addresses available for rent, how many bedrooms they are offering, and the asking price. Check again a week later and see which ads have disappeared. If you notice a pattern that for eg 2 bedders all vanish within a week, you know they are getting snapped up. Also go to lots of open for inspections to see how many people show up, and what sort of demographic they seem to be (eg students, young professionals etc). This will help you with some of the understanding of what the tenants needs might be. Also listen to what the prospective tenants are saying when they look through the properties. Are they saying "oh yuk I cannot believe the kitchen is brown" or are they saying "oh wow awesome, there are lots of cupboards" ?
For sale stock:
Similar, but talk to real estate selling agents rather than property managers. Watch the for sale pages on the real estate websites. Go to lots of open for inspections (for properties for sale).
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
They are excellent suggestions, I will be implementing immediately
I do believe it is currently a good area, and this research will certainly give me confidence or alternatively show me up if I am wrong.
But I am also worried about the new developments and the effect they could have on the current market.
Whether it's over supply or confidence depends on the area.
There's quite a few OTP developments in Canberra at the moment. While the boom in OTP properties stemmed from increased demand – it's been overcooked now and there's an over supply.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
The oversupply that Jamie mentions tends to happen, then you have flattening of the market until the stock gets taken up.
It's going to really depend on the area and on what sort of flats are being built. A boutique block of say 10 will be different to a 4 storey with 20-30 and a 10 storey with 100 will be different again.
If you do think they are good value (your homework should tell you soon enough if they are or not) then try to find something unique about what you are buying. Look for extra carspaces, storage or living space. Does it have a better aspect – say near the beach or park/bush. Make sure you find something distinct about what you buy so tenants and future buyers can see value.
Cheers
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
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