Investing in the Right Property Now!
Margaret Lomas
ISBN 9780987084910
See www.destiny.net.au/
for financial advice services.
See destinylive.com.au for
property management tracker (free for 1 property).
See also 20
Must Ask Questions for Every Property Investor, Margaret Lomas .
Destiny FinSoft is available for download on the www.destiny.net.au/
web site. It includes a number of calculators for doing one-off
calculations. These include depreciation, tax, loan and borrowing
capability calculators. It also includes a built-in web browser for
accessing the Destiny web site and the ATO, but not general web
sites since the URL bar seems to be uneditable. It appears to be a
tool targetted at a Destiny consultant visiting a client.
Determine if the gross regional product for the area (esp. local
council) is above the gross domestic product.
- see that more than one significant employer
- see council web site for economic brief, census data and
demographic information (but only if more current than 4 years)
- predictions for jobs growth
- check housing industry information
Does the property have everything going for it? (Refer to "20
Must Ask Questions for Every Property Investor")
- Cash flow for the property.
- Is there a low vacancy rate for the area
- Are there funded infrastructure projects in the area
State and local government (presumably info from govt web sites)
Carefully distinguish between funded and planned projects
- Is there positive population growth for the area.
(Local council should have population projections)
- Is there a lot of other development going on, or planned, that
will lead to an over-supply of rental properties.
- What are the trends for the area, and has the area already
peaked
- If the growth trends have been high for a while, are there
still reasons for this to continue
- Have rents in the area already gone through a growth period
- Are there good economic indicators for the area
- Are there businesses in the area, is the commercial premise
vacancy rate low (indicating business doing well in area)
- Are the residents in the area stable (see if they stay for
at least 5 years)
- Is the council 'go-ahead'?
- Are there too many rental properties proportionally (ideal
is 70/30 owner/renter)
- Employment rate between successive Australian Bureau of
Statistics census data
- ABS data for median household income should be not lower
that CPI. (Doesn't have to go up)
- Is there a town of size at least >50000 people within
30mins drive, and local town has >5000 people
- Is there more than one industry in the area. A single
industry/plant supporting the area lads to high risk.
- Is it a niche market (tourism, retirement village, student)
where the size of the market is smaller and perhaps riskier
- Is the property a good fit for your personal risk profile
(refer to the Destiny web site for calculator)
- Will banks etc lend for property in the area? (small towns and
niche markets are problematic)
- What is the market value for the property compared to the
asking price. Slowly bid towards the market price irrespective
of the asking price).
- Is this being sold via an unconventional agent?
- Who was the builder/developer?
- Are they still around?
- Is there still a warranty?
- Is there a rent guarantee? (if so, run)
- (Ditto for NRAS. Defence Force Housing may be OK)
- What property management arrangements are available
- Are there restrictions like strata title, body corporate,
hotel/unit management agreements
- How old, and in what condition is the property?
- Is depreciation scales available
- Are there big expenses coming up
- Are there high expected on-going maintenance costs?
- Remember to have a professional inspection and contract
subject to this
- Is it tenant friendly
- Are they likely to be frustrated
- What was the tenant turnover with the previous owner (if it
was previously rented)
- Is the title on the property 'normal'?
- Are there restrictive covenants
- Do the numbers add up for the property?