Should you buy an investment property in NSW or QLD?

Let me explain with an actual client scenario along with a couple of questions I get asked about the buyers agency services I provide.

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.

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