Property Hunter episode 2

By Staff Reporter

See an investment property through the eyes of a professional buyers agent. Learn what they look for when deciding if a property is right for their portfolio or one they should reject. Join Smart Property Investment as we go Property Hunting.

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Open homes can be exhausting – whether you’re battling crowds of emotional owner-occupiers, attempting to squeeze multiple inspections into one afternoon or trying to get a feel for an area’s current and future investment potential.

The exhaustion and confusion can set in before you’ve even started to weigh up the benefits of an individual property. How can you tell if a property’s wear and tear and irregularities give it cosmetic renovation and value-add potential, or if they will severely impact your bottom line? Sometimes bargain buys can look remarkably similar to properties that are discounted but won’t actually grow in value.

To help clear up some of the confusion and show Smart Property Investment readers what professional property buyers look for when they’re purchasing for themselves and for clients, we’ve launched an exciting new online video series.

In Property Hunter, we will identify features in each room of a house that investors should look out for and highlight aspects of properties that you should be cautious of.

The videos will walk you through a property and give a detailed analysis of everything from bathroom transformations to cheap fixtures and fittings and sub-standard renovation indicators to how to give a room more natural light.

Last month, Smart Property Investment travelled out to Raby, 55 kilometres south west of Sydney’s CBD to inspect a property and analyse its investment potential.  Despite some flaws, including a very retro kitchen and small bathrooms, Todd Hunter from wHeregroup said it was definitely a property he would consider for his own portfolio.

He said the property would be good to rent “as is” and also offered scope for low-budget value-adds that would enable investors to make serious money upon reselling the asset.

This month, we are once again out at Raby, but viewing a vastly different property that appears to have been quickly patched up for sale.

Todd joined us again and explains that there are some clear indicators the quick cosmetic changes were a “home handyman’s job”. In this month’s edition of Property Hunter, which can be viewed at www.smartpropertyinvestment.com.au, Todd says “you’re going to see some flaws and a couple of little surprises”.

Andy Scott, publisher of Smart Property Investment, asks Todd if the property’s imperfections – including uneven and scrappy paintwork, cheap and unsightly light fittings and issues with built-in wardrobes – would actually impact on this property’s investment potential.

Todd explains that with this particular property, the cosmetic issues will actually serve to thin the crowd of potential buyers. First home buyers, who are borrowing around 90 to 95 per cent of a property’s purchase price, won’t have the extra cash to improve the property and so will look elsewhere for a less problematic purchase – which Todd says is an advantage for investors.

Once the property hunt moves to the bathroom however, it becomes clear the property has some more serious issues.

Todd shows viewers of this month’s Property Hunter that this property has experienced major problems with water leakage in the past. He also explains the cost of fixing the associated plumbing issues and shows you how he’d transform the bathroom.

With a property such as this one, Todd says realistically investors wouldn’t be able to get a tenant in straightaway.


Listen to other instalments of The Smart Property Investment Show:
Episode 53: Six properties in two years: how this investor is achieving his goals
Episode 52: Will property prices fall? When? And by how much? What investors need to know
Episode 51: SPECIAL EPISODE: SPI team reveals all the financial details of its portfolio
Episode 50: 8 properties by 25: Former housing commission kid reveals how he changed his life and created wealth
Episode 49: How to build a sophisticated multi-property portfolio
Episode 48: ‘From just $2,000 in my pocket to 6 properties’
Episode 47: The SPI Show answers more listener questions: Special episode
Episode 46: 4 properties by 24 – how to build a portfolio without sacrificing fun, travel or food
Episode 45: Special guest Mark Bouris on what really makes property prices rise and when to invest
Episode 44: ‘11 properties by 31, now I’m stuck: What’s next?’
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