Data to Analyse Before Buying Property

WHEN IT COMES TO investing in #property, one must first do research. Investment is all about numbers and should involve as little-to-no emotion as possible. The problem is, during our research, there is so much data to be collected. And data is just that: data. It needs to be messaged into information which will eventually be useful in helping us with our investment decision.

It begs the question then, what information should an #Investor be looking at? I have heard many times how Investors can become trapped into analysis-paralysis mode. They are searching for so much information, so-much-so, it actually confuses them more. I know some people who never end up buying for years just because they get confused with so much contradicting information around property market.

As a Buyer’s Agent, one of the things we do is obviously doing research for our buyers. For every property we present to our client, we want to make sure it is not a “dud”. While there are many other metrics I have looked at, these are probably the core ones that I will always include in every research:

BUY-FLIP
1. Sold data of similar properties. An investor wants to flip: either renovate-flip or subdivision-build-flip, sold data will show roughly how much the finished product can potentially sell in current market. This will allow the investor to project potential profit.

2. Suburb profile including population demography (age, income, jobs). Being able to develop the right product for the demand is important. There is no point of building strata units in an area where 95% of the demand is for a house, for example. This data will assist in determining the right product to build.

3. Market growth direction. “Property Clock” can be used to identify where in the clock the suburb is sitting. The trend can be used to adjust the potential selling price.

BUY-HOLD
4. Rent yield. This is a no-brainer. This will determine the cashflow.

5. Vacancy rate. Every change of tenant is a cost to you. Every time your property is empty, it is a cost to you. This metric will help us knowing potentially how easy it is to get a tenant.

6. Previous sale history. To be able to know how much the property has sold in the past can give an indication the potential equity growth.

Then you have some GENERAL ones like:

7. Google Maps. Surely you will need to check for factors that affect property value and demand negatively eg. proximity to high voltage towers, T-junction, etc.

8. Bush Fire Zone maps to determine if the property is within fire zone.

9. Basic zoning information. This will help to determine if the property can be subdivided or not. Land appreciates, building depreciates. Any potential value add is always a bonus.

What metrics have you used? Have you been in analysis-paralysis mode?

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