Road to suc­cess means busi­ness-like at­ti­tude

Lead­ing an­a­lyst of­fers tips to make the most of op­por­tu­ni­ties

Sold On Sunshine Coast - - Market Review -

SUC­CESS­FUL prop­erty in­vestors are those who treat it as a busi­ness, ac­cord­ing to a lead­ing prop­erty an­a­lyst.

Even if it is just one in­vest­ment prop­erty, hav­ing the right mind­set from the start can spell the dif­fer­ence be­tween suc­cess and fail­ure, ac­cord­ing to Terry Ry­der of Hotspot­ting.

Mr Ry­der, who analy­ses the best ar­eas to in­vest in through­out Aus­tralia, said the peo­ple who strug­gled with prop­erty in­vest­ment were those who treated it like a part-time hobby.

Pin­point­ing the best place to in­vest in­volved plenty of re­search and anal­y­sis, he said.

Mr Ry­der said many would-be in­vestors got too hung up on fo­cus­ing on one par­tic­u­lar sub­urb be­cause some­one told them it might be good.

“The strat­egy in play is to find the right ar­eas and then the right prop­er­ties within those ar­eas,’’ he said.

And don’t only fo­cus on past per­for­mance as that could of­ten be mis­lead­ing and wasn’t nec­es­sar­ily an in­di­ca­tor of fu­ture price growth.

“Nowhere grows for­ever, as we are see­ing with Syd­ney and Mel­bourne, and nowhere is down for­ever,’’ he said.

“In 2011 and 2012 if you looked at past per­for­mance you would not have in­vested in Syd­ney, it had been a poor per­former, but if you had done the wider re­search or had good re­search sources, you would have been aware with what was com­ing up for Syd­ney be­cause there was an im­prove­ment in the econ­omy and all sorts of other fac­tors.

“If you looked at the num­bers right now for Townsville, you wouldn’t want to buy there, but we think that Townsville, be­cause of this mas­sive up­com­ing ex­pen­di­ture in in­fra­struc­ture and busi­ness in­vest­ment gen­er­ally is cre­at­ing jobs and the un­em­ploy­ment rate is com­ing down, con­fi­dence lev­els are ris­ing. Now is the time to con­sider buy­ing there be­cause it is go­ing to grow, but based on the past per­for­mance or cur­rent per­for­mance you wouldn’t want to buy there.”

Mr Ry­der said in­vestors should start out broadly and then fo­cus in their search.

“You start out with a raw area, which might be the over­all city cap­i­tal city or ma­jor re­gional city,’’ he said.

He said un­der­ly­ing eco­nomic trends (on a lo­cal level) strongly cor­re­lated with prop­erty mar­ket per­for­mance so it was im­por­tant to be across those.

“We are not so much in­ter­ested in the na­tional econ­omy, and not so much in­ter­ested in the level of in­ter­est rates which the economists like to talk about a lot,’’ he said.

“We look for eco­nomic in­di­ca­tors – in­fra­struc­ture spend­ing is a very big fac­tor.’’

Once those larger ar­eas have been iden­ti­fied Mr Ry­der said they started look­ing at the smaller precincts within those ar­eas.

“We tend to then think in terms of lo­cal gov­ern­ment ar­eas, clus­ters of sub­urbs. We are look­ing for a num­ber of fac­tors – sales vol­umes, be­cause price rises tend to fol­low (a rise in sales).”

On the other hand a slow down in trans­ac­tions or plateau­ing could in­di­cate price growth was about to come to an end.

This was borne out in the Syd­ney mar­ket where trans­ac­tion num­bers had been grad­u­ally slow­ing in re­cent years and so the re­sult was now a slow­down in price growth.

Mr Ry­der said an im­por­tant con­sid­er­a­tion for him when de­cid­ing where it was best to in­vest was the gen­eral level of amenity and in­fra­struc­ture in an area, th­ese made sub­urbs pop­u­lar with renters and helped im­prove val­ues in the area be­cause they were more in de­mand.

In greater Bris­bane Mr Ry­der said the rail link to Red­cliffe had had an im­pact on val­ues and a new uni­ver­sity cam­pus in Petrie would all have an im­pact on the lo­cal mar­ket.

“If there is a new rail link, if there is a new mo­tor­way or up­grade it is go­ing to help the prop­erty mar­ket at the end as well be­cause it cre­ates eco­nomic ac­tiv­ity and jobs along the way.’’

While fol­low­ing the in­fra­struc­ture trail could be one that paid off for in­vestors in the long run, Mr Ry­der said in­vestors should weigh up when was the best time to buy.

“There has been plenty of an­nounce­ments made of things that have gone ahead or not gone ahead when they were ex­pected to.”

He said the an­nounce­ment stage was prob­a­bly not the most cer­tain time to in­vest.

“Cer­tainly be­ing cau­tious my­self I would be wait­ing un­til I had rea­son to be­lieve it was ac­tu­ally go­ing ahead, con­tracts have been awarded, phys­i­cal works hap­pen­ing,’’ he said.

In Ade­laide Mr Ry­der said there were some big projects about to hap­pen which would change the face of its prop­erty mar­ket.

“I think it is a very un­der­rated econ­omy and prop­erty mar­ket,’’ he said.

“One of the big things there is th­ese mas­sive con­tracts to build navy sub­marines, and so it is tens of bil­lions of dol­lars over a num­ber of years.

“They are ac­tu­ally build­ing the in­fra­struc­ture right now to con­struct th­ese ves­sels, so we be­lieve that with that hap­pen­ing the Port Ade­laide area is go­ing to get a boost. Th­ese are the sorts of things that we look for.”

PHOTO: JARUWAN JAIYANGYUEN

A lead­ing prop­erty an­a­lyst says suc­cess­ful in­vest­ing comes down to treat­ing it like a busi­ness..

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