Researching suburbs to invest in.

Discussion in 'Property Information Resources & Tools' started by PropertyInvestment_Newby, 24th Apr, 2018.

Join Australia's most dynamic and respected property investment community
  1. PropertyInvestment_Newby

    PropertyInvestment_Newby New Member

    Joined:
    12th Mar, 2018
    Posts:
    4
    Location:
    Central Coast
    Hi
    I’m new to property investing and was wondering if I can get some tips on the best ways to research suburbs to invest in.

    I’ve been hit with the property bug and the last few months have been trying to learn as much as I can. Hopefully will be in a position to invest by the end of the year.

    Any help would be great and sorry if it is a very broad question. All of the podcasts and books I have been reading indentify the importance of doing your own research on properties and suburbs. But I am struggling to find a starting point/strategy

    Thanks in advance

    Cheers
     
  2. theperthurbanist

    theperthurbanist Well-Known Member

    Joined:
    5th Aug, 2016
    Posts:
    769
    Location:
    Perth
    Margaret Lomas’ book “20 Must Ask Questions” is a good starting point that will give you a broad understanding of what drives property values and yields, though I wouldn’t nescesarily follow it to the letter (ie read broadly).
     
  3. Anthony Brew

    Anthony Brew Well-Known Member

    Joined:
    18th Feb, 2017
    Posts:
    1,176
    Location:
    Australia
    For me to start learning a location (remotely) -

    1. Take a look at the approximate stage of the property cycle in the 4 major cities and choose one that is undervalued compared to the long running average

    2. Go to realestate.com.au/invest and you can see a map showing different prices of properties. Note down all the ones within +/- of your budget. I as looking for 500k so I noted down 400-600k suburbs

    3. Make up a spreadsheet with each suburb on a different row.
    for each row, have columns
    - Median price
    - KM from CBD
    - OO%
    - Household income
    - Vacancy rate
    - Distance to major shopping centre (under 1km a big plus)
    - Distance to train (under 1km a big plus in Syd/Mel/Bris)
    - Distance to bus (under 400m a big plus in Syd/Mel/Bris)

    4. Ask on PC for people who know the area, which are the lower socioecnomic suburbs and make a big red mark to stay away from those

    5. Private message people from that area on PC and ask them questions about the area. There are some nice people on the forum who are happy to give some local advice and suburbs that they like or have some sort of interesting history which is invaluable.

    You should start to get a bit of a feel about the locations this way. High OO, high median household income, closer to CBD/train/shopping are all long term growth drivers. Lower socio-econimic locations can improve and you can make a lot of money but if might start in 20 years instead of in the next couple of years and not worth the gamble


    Try and narrow down to a few suburbs that look good, then pick one of them and do this for each suburb that looks interesting.

    Go to google maps and take a look to see where in the suburb are the shops, schools, parks, train station. Also take a look if there is a big industrial area where it is all shops because you don't want to be too close to there.

    Then go through the last 6-12 months of sold listings and note down price, finish, block size, distance to train/shops, etc.
    You should start to get a feel for the better, mid, and worse parts of each suburb based on prices after accounting for property specifics.


    Edit: forgot to say, look for information on infrastructure planning and note it down for specific suburbs in the spreadsheet.
     
    Last edited: 24th Apr, 2018
    jefn89, vudu and luckyone like this.
  4. Tonibell

    Tonibell Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,107
    Location:
    Sydney
    You can also just try being a follower on PropertyChat - that was we did for the last couple.

    Just need to work out who to listen to and who to ignore - but the discussion here is generally good and ahead of other sources.

    It is a good way to filter things down to a level where you can then do your own detailed research.
     
  5. Coota9

    Coota9 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,286
    Location:
    Melbourne

    20 Must Ask Questions For Every Property Investor

    1.What is the cash flow of the area,generally speaking?

    2.What is the vacancy rate of the area?

    3.What are the infrastructure plans for the future?

    4.What is the population,population growth and demographic mix?

    5.What is the competition?

    6.What are the trends?

    7.Is there economic vibrancy in this area?

    8.Is this area close to a large town or city?

    9.Is there diversity of industry in town?

    10.Is this a niche market property,is there a second end use?

    11.Does this property match your personal risk profile?

    12.What financing arrangements can I access for this property?

    13.Is the property at market value?

    14.Who is the builder/developer?

    15.Is there a rental guarantee

    16.What will the property management arrangements be?

    17.What is the age of the property and what condition is it in?

    18.Is the property tenant-friendly?

    19.What are the title arrangements?

    20.Am I being commercial in my approach?
     
    HUGH72 likes this.
  6. Anthony Brew

    Anthony Brew Well-Known Member

    Joined:
    18th Feb, 2017
    Posts:
    1,176
    Location:
    Australia
    This is risky because you could be following someone suggesting you invest in some rubbish like OTP properties outside of the major capitals because they themselves sell that. O f course they never mention the downsides of this kind of investment since they have a vested interest by earning money off people who blindly follow what they say.
    It takes time to learn things yourself, but it is worth it considering the enormity of the investment.
     
  7. Jane Ridder

    Jane Ridder Well-Known Member

    Joined:
    22nd Feb, 2018
    Posts:
    176
    Location:
    Sydney
    These days I think the best starting point is to find out your borrowing capacity and work from there. Note you may not have to borrow the whole lot if you don't want.

    This should help to narrow down the markets, that you'll research.
     
    jefn89 likes this.
  8. Sackie

    Sackie Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    25,035
    Location:
    Vaucluse, Sydney.
    There are many suburbs that may show good potential but be out of your reach and or not inline with your strategy/goals/risk profile .

    1. Determine goals
    2. Determine acceptable level of risk
    3. Buy some books , Yardney, Lomas, Do, Linderman, Fitzgerald, McKnight, Slacksmith
    4. Choose a strategy in line with 1 and 2

    Read, underline, highlight all and a framework will start to emerge . Then you can take bits and pieces which suit you. Most never do this and imo it can make a huge difference. Also read the forum and try to connect with others who you resonate with.

    If you really want to take things to another level imo, also do some reading ( or youtube) on Jim Rohn, Les Brown in conjunction with those books .

    Someone not long ago said he spent 100k on an investing education . I can guarantee you if you buy those books, say 10-15 you will get the same (if not better) education for less than $300.

    At the end of the day all the information is useless if the mindset isn't also in gear. Good luck.
     
    Last edited: 24th Apr, 2018
    theperthurbanist likes this.