The wHat in investing....

We have covered the wHy and wHen in the last two newsletters… this month we are going to cover “the wHat” of investing.

Now wHen we say “the wHat” of investing we are referring to the types of property and the properties features that you will be investing in.

It's quite easy to say that you could simply buy a three bedroom house, one bathroom with a garage but is this wHat the people who live in that area want to live in???

To determine wHat type of property to buy, you must go back to your research, combined with spending time on a location. wHat you are looking for in the research is:

• Income range for the mass of the population of an area
• Age group and family composition of the mass of the population or an area
• Weather conditions
• Location

Income Range – by knowing how much the vast majority of the people who live in an area earn, you can determine both:

• How much rent they can afford to spend per week
• How large a mortgage they can afford, keeping in mind we always invest with selling in mind.

Age group and family composition – this will help in knowing how many people live in one house and what their age groups are. If it is an inner city area, it may be a singles area or if it is a colonial town it may well be an older aged area of just two people per dwelling.

Weather Conditions – this will help in knowing wHat features to look for in a house, if it's regional it may need to have rain water tanks or it if is in the tropics it may well need good drainage on the block of land and be an elevated house.   

Location – this can only be done by spending many hours on location to see wHere to buy and wHere not too… a good source of information here are building and pest inspectors. From experience they only invest in property in their local area and are very fussy wHere and wHat they buy. Their occupations dictate their eye for detail. Use this as a guide only. Don’t confuse cheaper areas with Housing Commission areas, many locals do and simply won't buy in cheaper areas as they are too close to where they live and comment this way because they wouldn’t live there themselves. I call this “Small town syndrome”. These areas are often the best buys and increase the most in value.

By combining the above information in a practical manner you can then determine wHat type of property you should be buying and whether that area has that type of property for sale in the price range you desire. This doesn’t always occur and if it doesn’t, then don’t buy there.

Some prime examples of how important this information can be in areas that the wHere group have previously purchase in for themselves and clients:

• Geraldton WA – both renters and buyers only want Brick veneer 4 bedroom, 2 bathroom, double garage with Air Conditioning and side access for a boat to sit in back yard on a 600m2 block or bigger. Also houses facing west get afternoon sea breezes every day known as the “Freemantle Doctor”. Therefore houses facing west may not need Air conditioning but will require good seals on security screen doors to eliminate doors rattling.
• Aldinga Beach SA – both renters and buyers want Brick veneer 3 bedroom, 1 or 2 bathroom, single garage on a small maintenance free block of 450m2 or less. Must have rainwater tanks due to lack of water.
• Macarthur NSW – both renters and buyers want to stay clear of housing commission areas. There are areas of concentration of Housing Commission in Macarthur and unless you know the area very well, you could be easily caught out in buying in the wrong street.
• Collie WA – both renters and buyers are happy in fibro 3 bedroom, 1 bathroom, homes with Reverse Air Conditioning as climate is very hot in Summer and extremely cold in Winter and a possible carport.
• Mt Gambier SA – with an aging population thru excellent retirement and aged care service facilities, both renters and buyers want small townhouse complexes or houses on very small blocks that are maintenance free, with good heating, security screens, alarm and secure garaging.

So as you can see by above examples, a lot of this info cannot be obtained through any internet research but only by spending many hours on location. And with every location that the wHere group buy into, time on and in a location is a crucial part of the final decision as to whether to buy there or not, more importantly, wHat type of property to buy.

If we had of simply purchased the typical three bedroom home we could have easily not made as much profit from the property as we did… and that’s wHy the wHere group have topped Australia’s top capital growth locations four year's straight!

See more of this months enews....

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