Forums / Property Investing / Help Needed! / Due Diligence for New Investors

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  • Profile photo of JerryJerry
    Participant
    @jerry_o
    Join Date: 2013
    Post Count: 46

    Hi All,

    Im new to everything related to property investing and I'm currently gathering all the free information I can get to equip myself with the needed knowledge to take my first leap to investing.

    Here's what I have learnt so far. May I please request that you add any relevant information that you know to help other newbie investors like me.

    RESEARCH

    First I need to study the population of a state. Population growth over a period of time, migration, immigration, demographics.

    By doing this, I have a rough idea of what state to look into just base on the population of an area. The more dense the population, the more likely the demand for dwellings. (house, unit, etc)

    Once I picked the state, i would concentrate my research to the top 5 most popular suburb of that state. To locate the suburb where people are going is a good indication of future growth.

    I would then narrow it down to 3 suburbs and then do the property research. Determine which properties are more popular for the demographics of the area. Then a further due diligence for each property inspected.

    This is how I would do my research for my first property investment. The sources will be the ABS website, residex, rp data, realestate.com and domain, local real estate agents.

    Please feel free to add or correct any information that is wrong.

    Thanks in advance!

    Jerry | Mortgage Station
    http://mortgagestation.com.au/
    Email Me | Phone Me

    Finance Strategist - Active Investor - Serving clients Australia-wide - Based in Sydney / Melbourne

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    Nothing wrong with the above approach but if its your first purchase I would stick local and attend auctions so get a better feel for the market, demographic, transportation, developments in the area, zoning, etc. It would be also within arms reach if you wanted to potentially renovate the property. Again nothing wrong with the above approach either.

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Jeremiah

    It all sounds pretty good.

    I wouldn't necessarily start off locally – especially if your local area doesn't show any indication of being an ideal place to invest in (and I have no idea if it is or isn't).

    Buying interstate can be daunting though – so if you do go down this path, I'd recommend trying to visit the area or if that's not possible, engaging a BA. Even if you carry out most of the due diligence, you might be able to find a BA on the ground who will inspect the properties on your behalf.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi Jeremiah,

    You need to have a budget too – have you seen a broker to establish your borrowing capacity?

    No point using the process you have outlined if the suburbs identified are outside your budget limit.

    Also look at where government and investment money is going to improve infrastructure. I have heard of people following Coles, Woolies, Bunnings and piggy bankking their investment decisions on the work of these large corporations.

    As a word of warning – be careful you don't over-analyse and end up paralysing yourself.

    Profile photo of se7ense7en
    Participant
    @se7en
    Join Date: 2011
    Post Count: 54

    As a newbie I second Derek's last bit of advice – be wary of the over-analysis paralysis. I analyzed like crazy which just led to more options and more analysis and then when I thought I finally had the grand master plan my situation changed completely – as I sit here typing from my office in Dubai of all places – sometimes I think that, while due diligence is important, if your onto a good thing you've gotta run with it and any mistakes or corrections needed can be avoided on your next project. Sounds like you've got your research strategy down pat Jeremiah, get onto a broker – lawyer- accountant and go for it!

    Profile photo of JerryJerry
    Participant
    @jerry_o
    Join Date: 2013
    Post Count: 46

    Thank you all for taking time to read my post. I appreciate your feedback and advices.

    @shahin – I still consider investing on areas near I live (Liverpool, west Sydney). If the numbers are better interstate, I'm keen to go ahead with that too. Cheers!

    @jamie M – BA is at the top of my list if i am to invest interstate. I am focusing on research for now and knowing what look for. Thanks for the advice!

    @derek – I have spoken to a few brokers which are also in this forums. They gave me an indication of my borrowing capacity. I keep that in mind to filter the areas that I can afford to invest. Thanks for the advice mate! Appreciated.

    @se7en – Well said. Cheers mate!

    Jerry | Mortgage Station
    http://mortgagestation.com.au/
    Email Me | Phone Me

    Finance Strategist - Active Investor - Serving clients Australia-wide - Based in Sydney / Melbourne

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Once you hone in on an area – pop back on the forum and see if anyone can recommend BA there.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

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