5 Tips To Sophisticated Property Investing
With the end of the year rapidly approaching, it’s a great time to reflect on the past 12 months. Are you on track to realising your property investment goals? Are you happy with the decisions you’ve made? Do you feel like ramping your strategy up a notch? Here are 5 top tips for sophisticated property investing that will help set you apart from the pack:
1.Increase your catchment area
Purchasing property set to perform from Day One means maximising your investment and avoiding opportunity cost. You don't want to see your money tied up in an investment that’s not working for you.
It’s unlikely your local area, as of today, is set to experience the best growth when compared with all markets across the country. In order to access a premium investment, increasing your catchment area of interest is crucial.
2. Where to begin your research
Australia is vast, it’s difficult to know where to begin your search when considering the entire country. We firmly believe, comparing state by state is far too general, with diverse markets (city/ regional) moving in different directions at any one time. Even city by city isn’t a specific enough catchment area to count on comparable market dynamics.
The key sits in analysing the market at an LGA level, then drilling down into the group of suburbs that make it up. At a particular point in time, these suburbs tend to be doing similar things for similar reasons. The secret is getting the LGA right and then locating the best suburb(s) within.
To find out how to locate LGA and suburb HOTSPOTS set imminent growth, click here.
3. Not all streets are created equal
Selecting the suburb for your investment is only part of the process. Identifying which streets to target and which to avoid, is vital to your investment success. Pick the wrong street, and your investment may always lag behind the suburb’s top performers.
4. Beware the white elephant
Once you've selected a property, in a prime investment suburb, positioned along a high performing street, knowing it’s value and negotiating below market is the final step in optimising your result.
When assessing value, make sure you’re comparing apples to apples. You want to be sure you purchase an in-demand property, that's leading the charge in terms of growth, and not a white elephant.
5. The optimum buying window
To execute on a premium opportunity, the buying window is extremely small - knowing the WHEN is equally as important as the WHERE. It’s critical you base your selection on first hand, timely research to avoid missing the boat.
In many cases, the optimum time to purchase, before the masses arrive, is approximately 10-12 weeks. Because of this, Ripehouse data is collated, evaluated and updated every 12 hours. We question the timeliness and relevance of investment “research” that is produced quarterly or takes many weeks to produce because, by this stage, the upside of an opportunity is lost.
Redan Victoria case study
Redan Victoria first appeared as a recommended suburb in our April 2017 Pinpoint Predictions Report. In the immediate months prior, we observed an extremely healthy market dynamic in Redan, with yields rising to 5.9%, sales volumes spiking and a distinct tightening of supply. These factors alerted us that growth would soon follow.
With investor demand and heat in the market rapidly increasing, we removed Redan from our Pinpoint Predictions list by July 2017. With a buying window of approximately 12-14 weeks, sophisticated investors, ready to execute on this recommendation secured excellent results.
In the last 6 months, Redan has experienced tremendous growth of 10-13%. The market is now experiencing BOOM like conditions and is primed for sustained and strong ongoing and future growth. The buying window, however, is now is firmly closed for Redan.
We recently caught up with Ripehouse subscriber, Ed Byrne who observed the Redan market first hand, “On the basis of the Ripehouse April 2017 report, I was looking at property in Radan. Having recently returned I am now seeing purchase prices $30,000 to $40,000 (10-13%) above what I saw 6 months ago.
“The heat in the market has definitely intensified. Back in April, I was inspecting properties in private or with one or two others, now I’m seeing 20+ parties at each open….I’m kicking myself that I’ve missed out on this growth.”