Hey guys, I have recently read Steve's book 0-260 properties in 7 years and am going through the number crunching template provided. All properties I evaluate are rejected because I set the estimated annual growth too low. Is there a way I can put an accurate figure in because I have been just plucking figures out of the air. Thanks heaps for your help.
Luke
Hi Luke
Nobody knows for certain what the capital growth of a particular suburb or property. However, an educated guess can be made, using factors such as:
– The historical capital growth of the suburb
– Proximity to a capital city or major regional city
– Promixity to educational facilities, in particular private schools
– Promixity to a major hospital
– The proximity to employment
– The proximity to public transport
– The proximity to lifestyle amenities such as restaurants
– The proximity to water (eg beach)
– The income level of the target market (which in turn is related to how much they can afford to pay for buying such a property)
– Forthcoming infrastructure projects that would make living in the suburb more desirable. Things like a new train line/station a new shopping centre, a new freeway
The rear pages of the Australian Property Investor and Your Investment Property Magazine have statistics in them. One statistic in particular that will interest you is the 10 year average annual capital growth figure.
Does this help you?
Cheers
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks Jacqui that helps a lot.
Excellent
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Luke
I could not agree with Jacqui more. If you look at inner city areas and look at the growth over 10 years it should give you an indication as to how the suburb should perform over the long term.
I will just add that it is important to look at short term figures you know market falls by 5%, normally referring to the last three months. Keep in mind that medium prices are based on what has sod in a given period so if you have a couple of new developments it may should that values are up. However it does not mean everything has gne up thas why long term sales figures are much better.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
To be clear, inner city areas are not the only areas that enjoy capital growth
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
well my comments could also apply to inner city areas of regional cities will also show long term growth figures. Now if a property in a regional area is $250,000 and growing at 10% it is from a lower base but is affordable and would still be better than buying a house and land package in an outer area.
It is also a matter of looking at long term trends as to where people are living. With fast trains and people wanting a more relaxed lifestyle I agree with Jacqui that some of the regional cities will continue to grow and thieve. Again look at the 10 year figures.
Nigel Kibel | Property Know How
http://propertyknowhow.com.au
Email Me | Phone MeWe have just launched a new website join our membership today
Thanks for your help guys. The 10 year figures in the property magazines are very helpful.
Hi
Really new to all this can someone tell me the book Luke is refering to ?
HI
Ok again a real newbie question. If an area has enjoyed strong capital growth over the last 10 years is this an indicator of good or bad future potential ?
Hi Matt, you would be wise to consider the 1/3/5 year growth figures as well. They might paint a different picture!
When you look at the 10 year growth figures, please keep in mind there was a freak 100% growth between 2002-2006 in the WA real estate market. Do you believe this could happen again? Unlikely!
http://reiwa.com.au/_Layouts/reiwa/images/research/medianprice_chartv2012.jpg
Great comment Minds eye. Just wondering, wouldn't the 10 year average flatten out the shorter year distortions?
Combined with Jacquie's comments at the top of this thread, you could have a fairly good view of the anticipated growth (falling short of a crystal ball
)ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi Matt,
This one – https://www.propertyinvesting.com/product/0-260-properties-7-years
We typically work off an average of 5% per annum, however as Jacqui stated it all depends on what you buy and where. Remember you make your biggest gains on the purchase not the sale.
If you want a safe projection, look at longer term growth for the area ie longer than the 7 or 10 years as this barely takes in one cycle ie. you may be taking into account two growth periods or two relatively stable periods in your timeframe.
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