Every client has either all or one of the below four questions.

Q1) Why should I hire your services when I can buy an investment property myself?
Q2) Where is the current hot location to buy an investment property?
Q3) Why should I choose you over a buyers agent who is local in the area where I am looking to buy?
Q4) Can you get me the property at under market price?

Answer to Q1

Due diligence.

For instance below is a client required for which the stage 1 analysis is being done to identify the cluster of suburbs at the pin code level where the sales volume pressure is building so that we could look at a bunch of other factors from supply and demand factors at the suburb level.

Followed by property level and finally price due diligence.

Client Requirement

Asset Type: Detached House
Price Range:250K 300K
Configuration: 3 or 4 bedrooms
Land Size: > 400 SQM
States: QLD and NSW

QLD has 15X more sales than NSW.

When I pull out the sales data as per the above image in NSW the top pin code 2340 has 10 sales for the last 12 months as against to 149 sales in QLD for pin code 4680.

QLD has 15X more sales than NSW and clearly, there is more activity happening in QLD and next level of due diligence is to identify the cluster of suburbs in and around the pin code 4680 against a bunch of data elements like days on market, stock on market, vacancy rates etc.

Based on the sales data you have 15 times more likely chances to experience capital growth in QLD than NSW.

Remember price appreciation happens when supply falls and demand increases for this to happen the transactional volume increases which is what we see in QLD.

Answer to Q2

Unless I have a clear requirement as above I wouldn’t be able to do deep dive to identify the locations where one should invest.

Secondly, let us say if you increase/decrease your budget by 50K then the list of pin codes and suburbs is going to be entirely different and for that matter investing in NSW might look more appealing than QLD. Possible to conclude only after analysing the data.

Identifying the hot location entirely depends on data analysis, your budget and multiple other variables.

Answer to Q3

If you had gone to take the service of a buyers agent who specialises in a location/region for instance in this case a buyers agent operation in NSW then you would have bought an absolute lemon when compared to buying QLD.

Answer to Q4

Possibly yes in NSW as the pressure is not much compared to QLD.

You might be better off buying in QLD in this instance as higher chances of achieving capital growth rather than securing a property for 10K or 15K less in NSW.

When it comes to investment property it’s all about capital growth and numbers.

Always you will have to look at the opportunities available at the national level.

Having thorough due diligence at each level is a must.

A difference in having 2% to 5% more capital growth than average with a compounding effect will help you achieve higher and faster growth.

I would let you do the math.

This is completely a custom service depending on what you’re trying to achieve like higher capital growth, higher cash flow, development potential site etc.

If in the market to buy an investment property and either having challenges with due diligence or challenges with time in performing the due diligence.

You may please provide your details to schedule a call and see how the entire process works in detail.

Assuming X and Y have done the due delicence and decided to buy in a suburb called Collingwood Park QLD.

I am not suggesting buying in Collingwood Park as I haven’t done any due diligence and this is for illustration purposes only.

One chose a house & land package the other chose to buy an established or existing house.

X Property

Price: $709,000

Land SQM: 420 SQM

Y Property

Price: 555,000

Land Size: 851 SQM

Cosmetic Renovation

The property bought by X does not have much room for cosmetic renovation.

The property bought by Y was built in 1990.

After 5 years Y can do a cosmetic renovation by spending $25K to $35K and create additional equity over and above the capital growth.

If done the cosmetic renovation right the thumb rule is for every $1 spent creates $2 or $3 of equity conservatively.

Development Potential

The property bought by X has no further property development potential.

Mr: Y has multiple exit points.

Exit Strategy 1

Hold the property for a reasonable time frame by when it becomes unaffordable to buy a house like Y in the same suburb and this creates demand for houses with a smaller footprint.

You may sell it to a developer at a higher price depending on the profitability at the time of the sale. Or explore JV opportunities with a local builder.

Exit Strategy 2

Hold the property for a reasonable time frame maybe 5-7 years and apply for DA approval.

Possibly spending $40K – $50K to get an equity uplift whereby you can knock down the existing house and build two houses etc.

Generally, properties with DA approval get higher valuations than properties without DA.

Very high likely chances the soft equity created is enough along with the property value appreciation to a get loan where you can knock down and build two houses.

Exit Strategy 3

Hold the property for 5 to 7 years to ride the capital growth cycle.

Build two houses and sell 1 house. This will lead to one investment property with very less or no debt.

Exit Strategy 4

Hold the property for a reasonable time frame maybe 5 to 7 years and apply for DA approval.

You will be able to sell at a much higher price than a property of a similar size which doesn’t have DA approval.

Note: Just by having a bigger land it doesn’t mean you can subdivide further. It is different from council to council.

Some suburbs may allow to subdivide into 300 SQM or lesser compared to some suburbs not less than 1500 SQM.

There are roughly 500+ councils in Australia.

You got to look at the LEP (Local Environmental Plans) to understand the requirements.

Secondly, even if the Y property is not a development potential site even then the Y property will get more capital growth than the X property.

The Land to build ratio for the Y property is much higher than the X property. It’s the land which appreciates and the building which depreciates.

Having the right assets is very important at the initial or acquisition phase of building a portfolio where most go wrong.

Whether you are a first-time investor or a seasoned investor and have challenges in acquiring development potential properties in your portfolio or accelerating your property portfolio.

You may please call me to schedule an appointment to discuss this further.

This is general information. This is not financial advice or any property development advice. I do not know your personal and financial situation.

Please verify the information before acting or relying upon the concerned professionals deemed necessary.

If you are in the market to buy an investment property you may please provide your details to schedule a meeting.

Apartments may be suitable for someone who has challenges in borrowing capacity or they have decided to buy only in Sydney and is not open for renvesting.

I do sell apartments as a real estate agent mainly for first-home buyers who are either below 30 years or above 55 years.

There are two things happening one interest rates have increased and hoovering around mid 5’s to 6% and inflation at 6% to 7%.

The interest rates are putting pressure on individual borrowing capacity and inflation is eating up capital.

For instance, if you have $100,000 in a bank account, at 7% inflation this means it is worth $97,000K twelve months from now considering it earns a 4% interest rate.

Probably wait and watch may not be the right approach.

There are a couple of things you could look at if chosen property investment as a vehicle to achieve financial freedom.

1) Buying affordable property: Recently PropTrack published data which looked at the share of newly listed properties hitting the market under $600,000.

In March 2020 when we first entered a lockdown, 52.5% of all new listings that month were properties for sale below $600,000 by last month that had fallen to 35.8%.

Secondly, historically affordable properties are more resilient to higher interest rates with steady growth and the potential buyers need to borrow less as well.

Having said that just because a property is affordable doesn’t mean they have a good capital growth potential. You got to do a supply-demand analysis.

2) Manufacture equity through cosmetic renovation: Generally, the thumb rule is if the renovations are done correctly you would create $2 equity for every $1 spent.

Yes, this can be done remotely through property managers even with interstate investment properties.

3) Buying a property which has a development potential: This could be a property that can be subdivided 1 into 2 or build townhouses etc in future but complies with the current council requirements to do that given development.

The idea here is not to do development but will create additional protection in creating further equity.

Yes, I have seen people getting DA approvals remotely to uplift the value of the property before selling the property.

4) Vendor discounts: Many vendors are reducing their prices to attract interest. As per CoreLogic, the current average vendor discount stands at 4.3% as compared to 2.9% the year before. This is the sharpest level of vendor discounting since 2018.

As property investment is always from a long-term perspective of 8 to 10 years it’s a good time to enter the market.

5) New Listings are drying up: CoreLogic reported for the month of Nov 2022 that the new listings have reduced drastically. There has been a reduction of 25.9% Australia-wide, 22.5% combined regionals and 27.6% in combined capitals.

If you’re thinking to buy a house & land package / new apartment as an investment property think twice as the boom is long gone and doing your due diligence is very crucial to achieve reasonable appreciation. Secondly, there is no room to manufacture equity-like what you can achieve with established properties.

This is not financial advice and only my opinion. You may please speak with the relevant professionals.

If you’re having challenges in terms of time, effort and skills happy to assist in your property investment journey.

I can assist in acquiring investment properties starting from $350,000 ( buy & hold detached houses) across Australia.

If interested you may please provide your details to schedule a zoom call.

When it comes to selling a house which is not a potential development site then reaching out to a local agent in the area in which the property is located is the best approach.

However, when selling a potential development site /property you got to speak with an agent who specialises in selling a development site.

You may ask why?

Well in most circumstances when selling a house which is not a potential development the way the agents assess the likely achievable price is based on the recent comparable sales.

When it comes to a development site this approach may not give the vendors an edge in getting the best possible price.

Broadly there are a couple of things which are required to be done to access the best possible price for a given development site.

1. The best and highest use of the land
2. Town planning feasibility
3. Financial feasibility

1) Best and highest use of the land: For instance, let us say that the site you intend to sell is in the R3 zone (The Hills Council Sydney) then the possible developments allowed are Attached dwellings, Dual occupancies, Multi dwelling housing and Seniors housing etc.

Each of the possible development types mentioned above will have varying requirements in terms of site frontage, site depth, site area etc. Accessing what is possible will have a bearing on the price that can be achieved.

2) Town planning feasibility: For instance, let us say the site is in R3 (The Hills council) then one of the possible development is Multi dwelling housing (townhouses). Based on the site we got to assess is it possible to build 3 or 4 townhouses. The yield will also have a bearing on the pricing of the site.

3) Financial feasibility: When it comes to selling a property to mom and dad buyers/investors more focus would be given to staging or how well the house is presented to attract emotional buyers but when it comes to development sites it’s all about numbers.

This is where it becomes performing financial feasibility to understand the GRV (Gross realisation value), TDC (Total Development Cost) and POC (Profit on cost) which dictates the pricing of the site.

Normally with small developments like dual occupancies, Townhouses or small apartment complexes, the developers would be looking at achieving 18% to 22% POC.

I have the skills and tools to perform site assessment to the point where we can say that the site qualifies to be a potential development site before requiring to involve required professionals for confirmation.

Yes, I am not a town planner or a builder but a real estate agent who understands the property development space and the players involved.

If you’re in the market to sell a development potential site in Sydney I am more than happy to assist in getting the best possible price for your development site/property by performing the above assessments and getting you the best possible price.

You may please provide the property details for me to call and discuss further.

Making the wrong choice could mean walking backwards in the property investment journey. Hence hiring a good buyer’s agent reduces the risk of buying an underperforming property.

Buyer’s agents, also known as buyer’s advocates, are licensed professionals that specialise in searching, price evaluation and performing property due diligence on behalf of the buyer.