Welcome back to the “S and L Property Purchasing Due Diligence Specialists” blog. In this post, we’re diving into the tools and methodology I employ to conduct thorough due diligence when choosing the right suburb to invest in.
What’s often perceived as a secret in the real estate industry is in reality, a better grasp of information. The game-changer lies in gaining insights into a local market’s movements or having the inside scoop on plans that aren’t common knowledge. This knowledge can position you for impressive gains by uncovering properties that might not catch your attention initially but fit perfectly into a savvy growth strategy.
When I dive into a property, I leave no stone unturned. I hunt for details ranging from the neighbours’ stories to local planning laws, zoning regulations, council blueprints, recent permits, and more.
Here’s a glimpse into what I investigate:
Suburb Analysis:
- Local Council Plans: Research upcoming infrastructure or development projects planned by the local council.
- Demographics: Understand the demographic makeup, age groups, family sizes, and income levels.
- Local Zoning Laws: Examine zoning regulations and their potential impact on property use and development.
- Crime Rate: Investigate the local crime rate to ensure safety and security.
- Amenities and Infrastructure: Evaluate available amenities and any planned upgrades or additions.
- Jobs: Research the job market and major employers in the area.
- Infrastructure Upgrades: Look for planned upgrades to roads, public transport, and other facilities.
- Neighbouring Suburbs: Study neighbouring suburbs for trends and potential impacts on your chosen suburb and street.
- Local Developer Activity: Research local developers and their ongoing or planned projects.
- Future Development: Understand upcoming commercial and residential developments that could influence the area.
- Population Growth: Analyse population growth trends and potential impacts on property demand.
- Transport Infrastructure: Evaluate accessibility and public transportation options available.
- Education Facilities: Assess nearby schools, colleges, and universities in terms of quality and proximity.
- Health Services: Research healthcare facilities, hospitals, and medical services.
Property, Street, and Neighbourhood Insights:
- Recent Sales: Analyse recent property sales to determine market trends and pricing.
- Current Listings: Gauge the current level of supply in the market by studying current listings.
- Days on Market: Understand the average time properties stay on the market before being sold.
- Sales-to-Listing Ratio: Compare the number of listings to recent sales to gauge demand.
- Auction Attendance: Attend property auctions to observe buyer behaviours and market dynamics.
- Median Sale Price: Compare property sale prices to the area’s median for insights.
- Property Condition: Assess property condition to estimate renovation costs.
- Street Analysis: Consider the desirability of the street and identify premium and undesirable streets.
- Property Desirability: Identify features that make a property more appealing to potential buyers or tenants.
- Infrastructure Access: Evaluate proximity to essential facilities like schools, shops, and public transport.
- Comparative Market Analysis: Analyse property prices in comparison to neighbouring areas for pricing trends.
- Rental Demand: Assess rental market demand, vacancy rates, and potential rental income.
- Capital Growth Potential: Examine historical capital growth trends and potential future appreciation.
- Building Inspection: Conduct thorough building inspections to identify structural issues.
- Future Development: Determine potential impacts of upcoming developments on property value.
- Local Community: Engage with local community groups, forums, or social media for insights.
- Pedestrian and Vehicle Traffic: Observe foot and vehicle traffic patterns throughout the day.
- Amenities Proximity: Evaluate the distance to parks, recreational areas, and cultural venues.
- Crime Prevention: Research local crime stats and the neighbourhood’s safety record.
Research Tools I Use:
I leverage both free and paid tools to analyse data comprehensively. These tools provide valuable insights into various aspects of a property and its surroundings. Here are some tools I rely on:
- Building Approvals: An interactive map that shows building approvals and construction activity in an area. https://absstats.maps.arcgis.com/apps/MapSeries/index.html?appid=9bcca246a6a44214a4e547a6738dc0a6
- Regional Population Change: A tool that visualises population change trends in different regions.
https://absstats.maps.arcgis.com/apps/MapSeries/index.html?appid=c5ceb84b6e34459a8b2baa397f3624ea
- Regional Population by Age: Provides insights into the age demographics of a region.
https://absstats.maps.arcgis.com/apps/MapSeries/index.html?appid=f863994852a8438e955f04755f073a94
- Commuting Distance From Place of Usual Residence: Helps understand commuting patterns, especially relevant in the post-COVID WFH era.
I also emphasise the importance of networking and seeking professional advice. Connecting with town planners, surveyors, building and pest inspectors, necessary trades, real estate agents, lawyers, accountants, brokers, and experienced investors can provide you with invaluable guidance and support.
Pound the Pavement:
Lastly, I cannot stress enough the significance of “pounding the pavement.” Spend time in the area, engage with locals, explore shops, converse with real estate agents, visit cafes, and attend open houses. Collecting data is valuable, but it’s the on-the-ground exploration that ensures your data aligns with the insights you gain from the community and environment.
Remember, in the world of property investment, the devil is in the details. Stay diligent, stay informed, and continue learning. Your due diligence efforts will pay off in the long run, helping you make wise and profitable investment decisions.
Stay tuned for more valuable insights from “S and L Property Purchasing Due Diligence Specialists.”
