The fundamental principles to buying property always come back to a great parcel of land, close to good amenities, with fantastic planned infrastructure and the potential to add future value. Land in great areas will always appreciate. Too often we see investors applying a strategy solely for tax reduction purposes. Whilst this is ok, and an important consideration, it should never dictate the type of property and location.
In terms of the actual property, we look for character in a property that can not otherwise be easily or readily replicated. By that we mean, buying a home with period and character features that will one day, be short in supply, creating emotional owner-occupier demand. Owner-occupiers buy with their heart and emotion.
The makeup of a purchase for us is 80% location and 20% property. By this we mean, the emphasis of the purchase is heavily skewed towards the location and the land make up rather than the actual property itself.
These are our key fundamentals to buying property. And fundamentals we live and preach on a daily basis.
For investment property purchases, we are big advocates of purchasing houses - not apartments - in gentrifying regions of major capital cities that are within 15km of the city CBD or 2km from major secondary cities. For diversification of portfolios, we also look to major regional cities with good access to a major capital city via public transport, planned infrastructure and not reliant on one economic driver. Providing a point of difference in clients portfolios and generally, a more robust option to offset other blue-chip markets.
We start with a macro approach to the Australian market, then qualify each state against our pre-requisite markers. We then determine the best regions within these markets that best match your purchasing criteria.
We hand select our preferred markets using the following (but not limited to) indicators (we have a benchmark for each identifier to accurately score each region).
If a particular area passes our benchmark score, we then take a deep dive into the suburbs within and extract as much information as possible through our subscriptions, estate agent contacts, reports, local councils and site visits.
One of the biggest deciding factors for purchasing real estate is timing. Understanding the Australian property cycle is key to a successful purchase. Ultimately, the aim is to be buying in a rising market to ensure you take advantage of early capital growth. This means you will have the ability to draw on the equity to continue to grow your portfolio. Poor timing means buying in stale/declining market, meaning, you will not generate any capital growth in the property and disable any ability to draw on equity to grow your portfolio. All properties will cycle through the journey and there will always be years of stagnating growth, however, it's the importance of when that happens that is the key.
Our region selection for your portfolio ties in with our strategy and the types of properties we are looking for to build a platform from. We had to wash our data with your specific strategy and ensure the regions we put forward align with that strategy. The first two purchases are a combination of growth and high yielding selections.
For property number 1, we are recommending a house in Brisbane’s northern suburbs, approximately 8 - 12km from the CBD on a block greater than 600m2 and under $600k.
For property number 2, we are recommending a house in the Belconnen region of Canberra, approximately 10km from the CBD and in close proximity to the new proposed light rail infrastructure. Ideally, the land size will be greater than 800m2 and under $600k. We like Canberra given the high demand for granny flats, amazing rental yields and record low vacancy rates.
We have provided a full analysis of each region, please click on the below buttons to see more. We have also provided an overview comparison of all options too.
What we like
So, now that's all said and done, we'd love to get your feedback on our findings. Please click on the buttons above to see our detailed findings in each region. Please take the time to review our feedback and we will put a time in the diary to catch up to discuss your thoughts further.