If you are considering investing in property, choosing the right developer and the right investment property project is critical.
This is where we start when we look for off-market investment opportunities. We pride ourselves on our selection criteria and the methodology we apply to the developers and projects that we choose to include our client selection portfolio.
It’s important to recognize that it’s not simply a case of accepting any project that looks good on the surface. We may have a relationship with a supplier, but we don’t take on and endorse every project that they create. We put each project through a process that we would encourage every investor to adopt.
Here’s some of the factors we look at when we choose the projects we endorse…
Check the developer’s completion record
Make sure that there’s a proven pipeline of completion and the pedigree of projects that they’ve completed.
Are all the same people involved?
While the developer might be the same, the other contributors can vary. Developers can, and do often use different builders, architects, interior and landscape designers for different projects.
We cross-check and make sure that we can really see who is involved, what components of work have been done to time by them in the past, and the significance of the communities in the location of each project. If you are considering a particular project, it pays to be clear on whether you are looking at the same or a comparable combination of collaborators so you know that the outcome will be similar.
Is this project in the developer’s sweet spot?
Developers have their sweet spots. Some are great with townhouses, others with house and land, and others again with luxury apartments. Each class of property has its place in your portfolio – but occasionally developers try their hand at new things. Our focus is on making sure that we are helping our clients diversify their good debt into different asset classes with experts in that style of project. That means identifying those projects where the developer is playing to their strengths.
What is the owner-occupier ratio of past projects?
Firstly, we look at the completed projects and see how they’re going to market. Part of that assessment, especially with house and land is to determine the owner occupier to investor ratio within the project.
A high owner-occupier ratio is good for everyone. In the way that a rising tide floats all boats, owner occupiers spend more on their homes. As a result, owner-occupier properties often have better quality finishes, fittings, or perhaps an extra rumpus room. This increases the visual appeal of an area, which in turn increases overall values and brings your property value along with it.
This means that when it comes to revaluing your property, depending on how many Even though it might be a new strait creates different ways that short-term performance can occur as a result.
Can we get in before the project goes to market?
We aim to get access to the development before they hit realestate.com. Not all properties within a development are the same. There are often small design differences that can make a big difference to a property’s rental yield and mid-term capital growth.
By getting in early, we are looking to identify the best properties and identify variations that can set your property apart for renters and buyers. Typical variations are things like a larger balcony, a larger land component within a townhouse subdivision, and corner lots where there’s one neighbour and not two.
Is the project in an area of land scarcity?
We often look for projects that are nestled within an established, sought-after location. This means that property availability will cap the developments in that area and limit overall supply.
Developers will simply not be able to secure enough properties to demolish and build new projects and the developer is therefore not going to be able to keep releasing more and more developments. This helps retain and build value in the property. This is one of the reasons we love luxury townhouses so much.
Doing the research is essential
If you are considering investing in property, these are some of the considerations that can make all the difference.
If you’d like to know more, and view our latest Melbourne Market Hotspot update, our free online academy is open to anyone wanting to develop their property investment skills. It’s free to join and our free video mini courses provide experience and advice on a range of topics from Finvest experts and active investors.
