How to choose a location for investment – what to look for and what to avoid (Ep.14)

Weekend excursions, reconnaissance missions and scoping out an area. While you may not be a secret government agent, you are on the property hunt, looking to make your next big decision.  

And did we mention you also need to be a time-travellerAnalysing data to ascertain historical outcomes and looking forward to determine future expectations. 

Understanding the key data based fundamentals of a location is part and parcel to making a successful property decision.  

In episode 14, the Property Planner, Buyer and Professor dissect If you’re going to invest in a new area, what in particular are you looking for 

Listen to David Johnston, Cate Bakos and Peter Koulizos, as they take you through the critical considerations when choosing a location for investment.  

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Show notes

  • Where do you start? The reconnaissance mission – visit the area and get to know it inside out.  
  • Open your mind! Take a nation-wide view. The state you end up buying in may not be in the same city as you live. Set your goals and then determine the macro location to suit.  
  • The story of Sydney and Melbourne – superstar cities. In a study of promising suburbs across cities, Sydney’s worst suburb performed better than Adelaide’s best.  
  • Using a Buyer’s Agent – they must be local, you’re on their turf.  
  • “Keeping an eye on your investment” – the biases that can lead us down the wrong path and make property mistakes including wanting to purchase in the same suburb that you live in. Do you understand your biases?  
  • Understanding your city and the needs of the locals – access to public transport is critical in Melbourne. Not that important for Perth and Adelaide.  
  • Hobart – how Airbnb drove up property prices by restricting supply.  
  • The pressure to regulate – changes of policy can be an artificial fillip that pushes up values 
  • Look before you jump on board because of FOMO (fear of missing out) and the impact this has on a bubble.  
  • How a great plan will help you hold every property that you buy, through to retirement.  
  • Look to the future: what will that location and property look like in 30 yearstime. What about population growth expectations? 
  • Your yardstick: the capital city. How does the data on your location stack up to the capital city? 
  • Determining location: where do the wealthiest people live in the city and why do they live there?  
  • Infrastructure projects and up and coming areas – what are the signs that an area is gentrifying? 
  • Mining data – 20 years plus is ideal.  
  • Make a day trip! Visiting the area to uncover qualities that data will not – an excursion can save you from making a mistake.  
  • Getting the deal done and understanding the way the local agents do business.  

David Johnston – The Property Planner’s Golden nugget: When you are purchasing in a location you haven’t been to previously, start on the macro level and ensure that you select a state and a city that aligns with your long term plan, strategy for your next decision and price range, then narrow down into the suburbs that matches. Once you have targeted certain suburbs and property types, it certainly pays to go and visit them and to understand the location or obtain Property Select support! 

Cate Bakos – The Property Buyer’s Golden nugget:  Understating the intricacies to the area that you’re planning on going into and understanding what the consumers or the residents who live there want – when in Rome do as the Roman’s do! Years ago, I was looking into Ballarat and applying Melbourne centric ideas to property selection, such as walkability and proximity to shops and stations. The reality is that residents don’t care to pay a premium to be close to the shops or station, they want a nice big yard and secure house.  

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