Finding a property

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There are so many different reason for renovating. We reviewed during the course a couple of strategies for renovating. One of these is upgrading your home to increase the equity and the other is to purchase an investment property with the plan to renovate. The technique applies to the latter, it assists you in doing the necessary research that allowing you to use the information from the past to apply to the future so that you can purchase in a suburb which will have a good chance of capital growth, combined with you increased property value, through renovation you will have an increased amount of equity that you can access.

Just as a hint this same technique can be used to find any property, a home or investment property without renovation.

1. Firstly work out what you can afford

2. Find suburbs within 10km of a CBD or Major Centre with the median prices that fit your price range eg a great place to find this data at small cost is by purchasing a copy of Australian Property Investor Magazine, every 2nd month gives median prices.

3. Draw up a spreadsheet of all the areas you can afford and list the capital growth over the last 3, 5, 10 years

4. Then list the surrounding suburbs and find their median price and growth over the last 3, 5, 10 years for each of these suburbs

5. Then list down the neighbouring suburbs to these suburbs and their median price and growth over 3, 5, 10 years. You are looking for neighbouring suburbs who have had strong growth figures in the past and which have higher median prices. When people cannot afford this suburbs they will look at cheaper suburbs nearby, ie the suburb you have identified.

6. From this shortlist start your detailed research, check demographics, average rent, vacancy rates, council plans and developments. You are looking for the suburb that is most likely to experience growth and that may seem undervalued

7. Select 3-5 suburbs. Prequalify properties on the internet and be prepared to go to every sale and rental open homes for 2 months. “On average you need to see 100 properties for every property you purchase” Dolf de Roos. Make sure you go to properties that fit your criteria ie have renovation potential and ALSO properties that are selling for the median price, this will show you what standard and amount of renovating you need to do to bring your property to the median peice.

8. Keep details of properties, on checklist and keep flyer or photos, these can be very handy in the future especially when they come back on the market.

9. Within 2 months you will be able to spot the bargains, the undervalued properties and those with potential. You will also be able to estimate what the average house should look like so you can start estimating your renovation cost. You will be able to determine what a renovated vs unrenovated house is worth