THE 12 THINGS WE LOOK AT

Jun 06, 2017
Michael Matusik

So, what do we look for when assessing an investment orientated residential project or dwelling product?

After almost 30 years of doing this stuff, we are either an absolute fluke or we might know a little about what we do.

For the record, I do think it has been as much fluke as focus.  But I am told I can be a difficult bugger.

This “12 things list” follows on from a Missive a few weeks.

So here goes:

  1. Pedigree

Who are the developer, builder and manager? What is their track record? Do they deliver what they say they will?

  1. Timing

In what position is the local market and subject product type in the property cycle?

  1. Who

Does the project appeal to at least three major housing local demographic subsets?

  1. Value

Is the properly fair value? Is the starting rent sustainable?  Are you getting the best deal?

  1. Rental market

How big is the local rental market? What has been the local vacancy rate and rental growth over the recent past?

  1. Supply

Underlying demand versus potential to supply similar property in terms of price, design and site attributes.

  1. Design

Is the project and product well designed? Does it appeal to renters now and potentially owner-residents on resale?

  1. Depth

How big is the local market? Could you resell your property relatively quickly and above your purchase price?

  1. Need

Is there a local need for this property type?  Are local jobs being created and how sustainable is the economic base?

  1. Site

How good is the actual site?  What facilities are proposed and importantly, already exist in the local area?  How good is the local amenity?

  1. Evidence

Does the property have valuation support? Does it have independent rental and financial evidence?

  1. Exit

What are the longer-term demographic and economic trends? Does this property/project fit in with our housing market outlook?

We will continue this discussion tomorrow and on Thursday this week.

PS  What is focus?  I heard this definition the other day –

Focus On Course Until Successful – and it didn’t come from a real estate agent!

Keen to hear your thoughts.

Until next time,

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Michael Matusik

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