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Whether your proposed investment property is an apartment, family home, unimproved land, or a commercial premises, you should have in place a real estate strategy. This strategy may well mean that a Sydney based property investor should look as far afield as Brisbane or Perth to take advantage of a real estate boom in these areas of Australia.
THE FAMILY HOME
Family homes are considered to be an appreciating asset and as such will provide a hedge against inflation. The purchase of property in the most desirable location may not always be within budget allocation, therefore research is needed to determine the areas of future desirability. The quest for a better lifestyle is changing property values in both city and rural areas of Australia.
In Queensland, Brisbane's sleepy Bayside area is attracting it's share of interest however the more affordable properties for first home buyers were located in Logan and Ipswich.
Now, the area perceived as being both comparatively affordable and as having good access to the water is Lota where it is still possible to buy property for $150,000.
In Perth, Mandurah and the south coast towns continue to draw investors. While house prices in the Western Australian capital will barely keep pace with inflation in Sydney, Melbourne, Canberra and Adelaide over the next two years, BIS Shrapnel’s three-year property outlook report predicts Perth will record double-digit growth through to 2007.
Whilst family home affordability in Canberra is continuing to decline, demand for small rural residential acreages within 30 minutes of the CBD has increased. Braidwood, situated between Canberra and Batemans Bay, is attracting considerable interest from home buyers.
In Victoria, a number of regional towns within commuting distance from Melbourne are offering increased employment opportunities and a refreshing lifestyle. High Melbourne property prices have contributed to home buyers looking further afield to towns such as Ballarat, Bendigo and Geelong. Closer to Melbourne, towns such as Castlemaine, Kyneton and Daylesford are becoming popular with both home buyers and investors alike.
Due to large increases in property values in Adelaide, home buyers are heading for the hills. Once again the attraction of a rural lifestyle within commuting distance of Adelaide has drawn home buyers attention. The new Adelaide Hills expressway has cut travelling time to the city to just 30 minutes. According to a survey by the Real Estate Institute of South Australia, a vacancy rate of just 2.3 per cent, also has investors looking favourably at the Adelaide Hills.
Appreciated values create an equity bonanza for the property owner. When a property does appreciate significantly, home owners are able to borrow against the equity they have in that property. Real Estate does not always increase sharply in value but the home buyer's the long term outlook is always good provided he has done his homework and bought property in a growing area.
BARGAIN SHOPPING FOR REAL ESTATE
Finding a bargain real estate deal is like any other bargain hunting... it takes persistence and hard work.
Your primary target is the seller who is motivated to sell below the current market value. Finding this motivated seller requires keeping your nose to the ground.
A motivated seller is usually one with an urgent reason to sell a property, possibly below local market prices.
LOCATING THAT BARGAIN PROPERTY
Whilst the concept is simple: find the right property and seller and negotiate a bargain price, many people are complaining that the strength of the market precludes investors from finding good deals on properties. Currently, the real estate market in Brisbane, Sydney, Canberra, Melbourne, Adelaide & Perth is hot, hot, hot! The conception that in a rising market, even the most motivated seller can find a buyer for his property at full market price is not necessarily true.
A calm and logical person knows that time and patience will realise full market value for their property however, when a seller has emotional issues motivating their sale they are often willing to accept a lesser amount simply to dispose of the "real estate problem".
Some of these emotional issues may include:
- Divorce
- Death of a loved one
- Job transfer
- Landlording issues
- Financial problems
WHERE TO LOOK FOR YOUR BARGAIN
Successful real estate agents target an area to increase their business activity. They pick a neighbourhood or two and focus their marketing efforts within that area. You should try the same technique. Start with your preferred neighbourhood and gradually increase the scope of your search.
Spend a few weekends driving around your target suburb. Learn about the area, the style of houses and the average market prices. It isn't necessary to cover every square kilometre of the Sydney metropolitan area however, it is important to learn the value of "typical" homes in your target suburb. This valuable knowledge will enable you to make quick and informed decisions about whether a particular property is a bargain.
Visit open houses and "for sale by owner" properties advertised in local papers. Speak directly with owners and their agents. Pass out your business cards and express your interest in various properties.
Part of the process of finding a bargain deal is the ability to recognize one. Take a mental inventory of every house you view. List the assets and note the negative aspects of each property. After visiting a couple of dozen open houses in your target suburb, you will get to know the value of the different styles of houses and their inclusions. If someone calls you about a house, you will soon know the value by its description alone.
THE UGLY DUCKLING
During your weekends driving around the target suburb, look for any vacant, ugly houses. After looking for obvious signs of vacancy...overflowing mail box, unemptied garbage, overgrown grass and uncovered windows, knock on the front door. If, after observing all the "signs" that the property is vacant, someone actually answers, politely ask if he is interested in selling. More often than not it will be a rental property, so ask the tenant for the name and telephone number of the owner.
Now supposing the property is really vacant, take a look through the windows, ask the neighbours if they know the name of the owner. Generally, the neighbours of ugly houses will be helpful to anyone who might be interested in improving the property. Finding the owner of a vacant house can be difficult, which is why the persistent bargain hunter who finds the information is likely to save the most money. The name of the owner can often be found by calling the local council office. | 
