Topic: Property

by Jamie McIntyre

( A 21 Point Criteria Checklist I use to build a property portfolio fast ) 

1. Select properties within the $250,000 to $500,000 price range.

Properties priced below $250,000 will either be too small, not have the desired quality finishes, or not be in the best possible area.

• If the property is priced over $500,000, (in most cases) it will cease to become affordable to the vast majority of tenants. Most tenants will not be able to afford rental payments of $550 plus per week.

• It will also be difficult to obtain a 90% LVR finance option from most institutions.

2. Select properties within sought after “lifestyle” locations that will attract consistent rental demand by quality tenants.

• Select properties in established residential streets.

3. Select properties in areas within 15kms of the CBD but not the CBD or some CBD fringe areas.

4. Select properties within suburbs and streets where limited land is available.

• If there is limited land available for further development, you will have less competition for tenants.

• Property values will also increase at a greater rate.

• “Limited land” also means that the area is in demand — people want to live there.

5. Select properties in suburbs with proven capital growth over the past 5 years.

6. Select properties close to “water”, e.g., beaches, oceans and rivers.

7. Select properties in suburbs, which have a high rental demand.

• First call, then visit the “top” agents in the area and check their rental lists to assess the rental demand, e.g., check how many properties are on their For Lease list.

• Talk to the agent’s rental manager in regard to “rental growth” in the area.

8. Select properties in areas, which have “affluent” tenants with high disposable income.

• More and more people are now leasing residential property, and investing excess income into investments.

• The higher the tenants income, the more chance you have of raising the rental amount every year, and the less chance your property will be affected in the event of a recession or market downturn.

• High capital growth areas where gay individuals choose to live. Generally no kids and higher disposable income, i.e., Paddington in Sydney, etc.

9. Select properties which are located close to public transport.

10. Select properties which are “in demand” from corporate tenants.

• Corporate tenants pay more money, and are very secure tenants.

• You can call Relocation Agencies (listed in the Yellow Pages) to find out what suburbs corporate tenants most prefer.

11. Select properties close to educational facilities: universities, major public and private schools.

12. Select properties close to major sporting, dining and entertain-ment precincts.

• These days, people prefer eating out rather than cooking and eating in.

Part 2 of " A 21 POINT CHECKLIST..." will be published in the next issue. 

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