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Need some input and comments on my research methodology

Discussion in 'General Property Chat' started by Tekoz, 5th Jan, 2016.

  1. Tekoz

    Tekoz Well-Known Member

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    Hi All,

    Based on the thorough analysis here, can someone please share your thoughts and comments if I’m wrong or correct based on my research using the premium search engine subscription www.propertyvalue.com.au/explore

    Let say, I have bought new H&L package in Park Ridge QLD 4125 last year with the price of $308,500 for 3/2/2 house 350sq Meter build by Australand.

    The reason I choose this location is because of the following reasons:
    • Affordability for me because it is still under the median price of the suburb and also within my price range. See the below Suburb insight report taken as at 5/1/2016
    [​IMG]
    • My new 3/2/2 property cost me less than the typical 3 bedroom existing house.
    • Median Sale Price below shows that $308,500 is well below the median asking price of the suburb. Hence there will be some potential price appreciation to that level in the future
    [​IMG]
    • New building attracts better tenant and more people likes it.
    • New building can get more depreciation which should bring me closer to cash flow positive.
    • As we are getting busier, people will certainly prefer to have smaller backyard due to the reduced maintenance level, hence I choose this type of property over acreage or even existing ones which is well known for termite attack and infestation.
    • Looking at the median rental price, the new smaller property will certainly cover most of the mortgage expenses
    Median Rent
    [​IMG]


    • Based on the graph below, the majority of the people living in this nice suburb is owner occupier not renter, this can potentially drive the value up of the rental property due to the scarcity factor.
    • The stock on the market is not that many which means people still loves to stay and own property in this suburb.

    Occupancy & Stock on Market
    [​IMG]

    • Last but not least, since I bought last year and based on the report below, you can see there is quite some Capital Gain here from the typical 3/2/2 new H&L package that I bought $308,500:

    Instant Equity
    [​IMG]

    Hence I have decided myself to bought it last year.

    I strongly recommend for anyone who is looking for investing in proeprty to consider this approach based on my reasearch above.

    Hopefully it will become a true testatment of success for all of you.

    Cheers !
     
  2. Mumbai

    Mumbai Well-Known Member

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    [​IMG]
     
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  3. Ouga

    Ouga Well-Known Member

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    "Trying is the first step towards failure" Homer
    So according to this "premium search engine subscription", the median value for a 3 bed house is $1.1m and the median value for a 5+ bed house is $700K while the 4 bed is valued at $820K.

    I hope you are not paying anything premium for this service!
    Sounds like these are just numbers averaged out a wide variance of results which would not mean much. It comes down to the place itself, the location within the suburb and the actual numbers involved rather than medians across a suburb.

    I would have liked to see comparable sales in the same street or a few streets away, comparable properties.

    To me, this analysis does not mean much at all, but I hope you get a great investment result out of your approach.
     
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  4. samiam

    samiam Well-Known Member

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    have you got your tenant yet? for me, show me money first ;)
     
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  5. Greyghost

    Greyghost Well-Known Member

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    Land land land land land...

    Although there may be 9,10,10 pros for a suburb there may be only 1 that will outweigh all of them...
    It's my opinion that of you could have stretched to 350k when you bought you could have brought something that would have generated better CG sooner to find your next purchase. Now I think you will need to sit on this one for 5 years or so in order to generate anything, even of you did. It below mv.

    It's important to be impartial and not have rose coloured glasses on..
     
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  6. S1mon

    S1mon Well-Known Member

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  7. MTR

    MTR Well-Known Member Premium Member

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    Same here.
    Be more interested in how much land developers selling in this area, how much stock on the market and turnover in sales - timeframe. These are pertinent to me.

    I generally ignore these stats because they can be pretty meaningless, most out dated, skewed due to product sales, what's the point really

    Marisa:)
     
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  8. Tekoz

    Tekoz Well-Known Member

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    @Ouga Well this is $49 weekly subscription service while the data is from RPData.

    Do you think is it worth it or accurate ?
     
  9. Tekoz

    Tekoz Well-Known Member

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    @Sam it is still in progress, so hopefully at the end of this year everything will be smoohtly settled :cool:
     
  10. Tekoz

    Tekoz Well-Known Member

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    @MTR So what stats that you pay special attention to ?
    I've paid premium for this subscription service so it is of course can be trusted.
     
  11. Tekoz

    Tekoz Well-Known Member

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    @Greyghost when you look at the property listed price in general, it shows that every 3/2/2 house newly built is worth more than $308,500 so it is clear indication that the value has appreciated significantly after the H&L is sold while it is still Off The Plan.
     
  12. mrdobalina

    mrdobalina Well-Known Member

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    Have you analysed some of the external factors that could drive capital growth?
    Such as current infrastructure, planned infrastructure, developers moving into the area, businesses expanding in the area (particularly big box types like Bunnings), rezoning potential, etc.
     
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  13. teetotal

    teetotal Well-Known Member

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    I know what you mean. In that case your target market is First home buyers who are after a H&L package. Sell it as soon as it builds and show them some discount to what is available from other builders.
    If you want to sit on it you'll have to do it for 5-10years in my opinion.
    Cheers
     
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  14. Bran

    Bran Well-Known Member

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    Tekoz, I ,like many others tried to talk you out of it.
    You CANNOT rely on a median based on 11 houses - it sounds like 6 of these were expensive properties, probably with large land components.
    In my 'research' (I don't do much), I automatically dismiss the new builds with their 100K premium compared to existing properties. But, I don't think you will go too wrong at that price point, and your timing was pretty good- the question is just how 'right' it will be.
    If you can get a tenant (at the median $380), with the depreciation of a new build, they are probably good numbers.
    Supply is the concern. But - good luck!


    I admire your persistence, but I'd diversify next purchase.
    If you wanna sell it for $308, send me a message and Ill take a closer look ;)
     
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  15. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    My #1 input on your research methodology:

    Leverage and listen to other investors – those with some runs on the board. :)
     
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  16. Greyghost

    Greyghost Well-Known Member

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    Yes I think you did the right thing in getting a 3/2/2... Definitely.
    But does it also have a study that could be utilised as a fourth bedroom?
    @sash was on the money here in that people would rather the larger house footprint with the study/fourth bedroom, for resale value also these type 4/2/2 will always stand out and demand a premium over 3/2/2's with a larger backyard.

    Mate something I think you have overlooked is this:

    With new estates, owner occupiers don't want to buy someone else's package.
    They want to build it their way with their colours etc. Even though some of these are modest houses they are "dream houses" to some people, thus they want to make all the decisions.

    We have a friend who built a double story in Berwick (past Dandenong in Melb). They are now trying to sell to move closer to Chelsea but are having no luck, because for a similar price or slightly more someone can build their own home their way..

    @sash is the expert in this field.
    But I believe he is a build and hold type strategy. I believe he also does extensive DD in relation to infrastructure and growth drivers in the areas.

    Cheers
    GG
     
  17. Azazel

    Azazel Well-Known Member

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    It's cheap enough I guess to not have too much of an impact. The land is small, but it's brand new.
    You could always move there too!