How To Find The Best Property To Invest In (Part 4/4)
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How To Find The Best Property To Invest In (Part 4/4)


Have you found a good suburb and a good area
to invest in? The next thing you want to be looking for
is the right property within that suburb to get the maximum returns possible, as well
as the right property to deliver you cashflow. So in this episode we’re going to look at
how you can find that property or how you can generate that cashflow yourself. Hi, I’m Ryan from on-property, helping you
achieve financial freedom. And today I’m joined with Ben Everingham from
the buyer’s agency pumped on property and so really excited to have you here today. Ben. Thanks for four K. let’s run. We are working through this series and I hope
you guys are loving this content. This should be putting you in a really good
position as a first time investor to reduce your risk, to maximize your returns and to
help you achieve financial freedom. So we’ve already gone through the steps where
we’ve set our strategy in place. We’ve located the best suburbs that we want
to invest in. Now it’s about finding that right property
for us, the crude property in the suburb that’s going to grow more than the other properties
as well as the property that can give us that cashflow because often in those good areas,
the cash flow doesn’t come for free. Does it vent now like unfortunately, the closer
you get to the beach, the closer you get to the city, the cashflow can be a bit harder
to find sometimes. Yeah, so in something like a country town,
often there’ll be positive cash flow properties everywhere, especially with low interest rates,
so you could just basically buy anything and be positive cashflow, assuming you can rent
it. As you get into those more premium pockets
of cities. The rental use tend to be less so it’s harder
to generate a positive cash flow, so as we said, we want both capital growth and cash
flow. That’s why we chose the good suburbs because
we want that capital growth. Now we’ve got to work hard to get our cashflow. It’s not going to come for free and most investors
stop here. They’ll just buy any old property within that
suburb to get the capital growth that we negatively geared to the hill and then something will
go wrong in their life and they’ll then have to sell that property and they’ll never get
the capital growth anyway. So we don’t want you to be in that position. So we want you to find a good property that’s
going to grow with the suburb, but it can also generate that cashflow and put you in
a good position. I heard something from the Australian Bureau
of stats the other day that shocked me, which was you looking at statistics. What was I doing? Fifty percent of Australian investors sell
their property within the first five years. That’s crazy. Now, if it takes, you know, 10, 15, 20 years
to create financial freedom, it’s just so clear to me now why people don’t follow through. So if you’ve got great cashflow and you’ve
got great growth, the likelihood of selling a property is significantly lower than a property
that’s performing well from a growth perspective. But it’s still costing you two, three, four,
500 bucks a week out of your cashflow. And that’s the thing so many people get in
a position where they can’t afford these investment properties and even though they’re great longterm
investments, they have to sell them because short term they just can’t manage the cashflow
and they can’t continue to pay it. So if you own a cashflow neutral or cashflow
positive position, then not going to have to sell that property because it’s paying
for itself. It’s paying itself off. It’s only if you deem that it’s no longer
a worthy investment or maybe something dire happens in your life and you have to sell
that, you’re going to go ahead and do that. So your chances of financial freedom is going
to be higher. Absolutely. And that’s all we want. We just want you to have the biggest chance
of succeeding and getting those choices in your life sooner. Okay? So when it comes to finding the best property
in a suburb, there’s some things that you want to avoid. And again, the same process that we took in
eliminating a bunch of areas. When we looked at our suburb research, we’re
going to take the same approach in eliminating a bunch of properties in the market, so if
you’re looking at train lines, if you’re looking at main roads, we want to avoid those really
sort of busy things where you’ve got that noise pollution because again, it’s the same
situation where properties on a main road just probably aren’t going to grow as well
as properties that are in a quieter street, so there might be just a small difference
in price now, but over the next 15, 20 years as that market grows, which is should it be
at the right market? Then there’s going to be a big disparity between
those properties. So you want to buy the highest quality properties
in the area, not the lowest quality ones. I saw properties in Melbourne on main roads
seven years ago that you could buy for $400 and then the property and the beautiful quite
straight next to it for 4:50. Now one of them is worth one point two mil
and one of them is worth 800 k. So this is what Ryan’s talking about there,
it’s, you know, as simple as this, like take a drive around the suburb and identify where
you would want to leave if you were raising your family long term. Whereas or the Nice homes, the nice quiet
streets, the premium properties with a nicely mowed lawns is probably, if you were to overlay
the data, also the premium pocket of the suburb where the highest and most expensive selzer
yeah, and also where the most owner occupiers are in the suburb as well. So there’s a bunch of data that you can overlay
looking at that suburb to just really cancel out a bunch of properties, which is gonna
make your job so much easier as an investor because when there’s those properties coming
onto the market, you can instantly see, okay, no, this property is right under the power
lines, so just throw that away. You’re not wasting your time on that. You’re not inspecting that property. You’re only inspecting the ones that are high
quality that you’re more likely to buy it. Yeah, and I’m very simple way to do this is
print out a map of the suburb on Google and then jump onto the sold section of real estate.com. Get three different color pens and cheap stuff
in one color, middle stuff and expensive stuff in another color and then over time, very
quickly after putting 10 or 15 different dots on there, you’ll start to see clusters of
cheap pockets and expensive pockets and you know you’ve got to start with what you can
afford, but if you can afford it by the middle and the premium pockets because over time,
quality wise there’ll be a difference and this may adjust what suburb you invest in
because let’s say you have a certain budget and you have two suburbs that are both likely
to grow in one silo but slightly cheaper so you can buy the premium pocket in another
suburb. It’s more expensive, so you have to buy a
property ride on a train line or right on a main road where you might want to actually
eventually ditch that suburb because you can’t buy the right property in there and focus
on the suburb. Where you can buy the right property, oh,
in much personally prefer to buy a premium pocket and a great any cried area with great
longterm quality tenants and owners, Dan, to buy the cheapest property in the best southern
and then the next step is to make sure you’re getting that cash flow, so in some circumstances
you may be in a pretty good cashflow position anyway, but buying in an area that has a good
rental yield. I know a lot of the suburbs you guys are buying
for investors have yields of about five percent, which is an excessive but given low interest
rates, it can put people in a cashflow neutral position, but then it’s about how can we manufacture
cashflow on top of that? Yeah. One of the easiest ways to do this that I’ve
found, and it’s not available everywhere in Australia, but definitely in pockets of Sydney,
in pockets of Brisbane, you can actually go and buy a house on a nice big block and then
you can actually construct that granny flat in the backyard in the future if that’s something
you’d like to do. So an example of this is maybe you go out
and you buy a 400 k home and that home rents for 400 bucks a week. Then you go out and you build your $120,000
granny flat. We transfer another 300 bucks a week, all
in you’ve spent, you know, $520,000 and you’re getting 700 bucks a week in rent and that
type of opportunities available within 20 days of Brisbane City right now and that type
of opportunity was available in Sydney about 10 years ago. Granny flats can be a great way to take your
property that’s going to be negatively geared and to put it in a positive cash flow or cashflow
neutral situation. Or You could renovate that property as well
to increase the cashflow. Or there might be an opportunity to add a
bedroom or to add a bathroom either externally through development. That’s more costly. Sometimes you can get properties where you
can actually just move internal walls in order to get an extra bedroom and that can be a
great opportunity to manufacture more cashflow because obviously a four bedroom property
is going to rent for more than a three bedroom property. Absolutely, and then there’s the old granny
flat that we love on the back on top of that, which is the easiest way that I’ve personally
been able to figure out how to dramatically increase your return from that four to five
percent to that six to seven percent range. Yeah, so you’ve already purchased a good property
in a good area. Now you’re just adding the cashflow onto that
and you can go ahead and do that immediately. When you purchased the property or let’s say
you’re not quite ready to build a granny flat. You can purchase that high quality property
and then maybe in a year or in two years when you’ve had time to save up a bit more money
to finance the granny flat, you can go ahead and do it then. So you might not be in the best cash flow
position from day one. But you know that in the future you’ve got
that plan and then once you build that granny flat and getting that positive cash flow position
than the property you can actually pay itself off. So manufacturing, cashflow doesn’t have to
be that difficult. It’s just a few simple strategies that can
get you there. But when you’re looking at purchasing the
properties, you just need to have these in the back of your mind that you can do them
in the future to create that cash flow. Because often the cashflow isn’t going to
be there itself. You’re going to have to do something to get
it there. So when you’re looking at these properties
in the suburbs, you want to cancel out the ones on main roads and train stations and
things like that, and then look within those high quality properties. Then you’re looking for opportunities of how
can I add cashflow? Yeah. And I think it just like we talked about before,
gives you that security, that safety net against interest rates, against market changes, against
events that happened in your life that you can’t see coming right now. So I think the longer you can hold a property,
the better off you’ll be if it’s the right one and cashflow just helps with that longterm
hold concept. Yeah. So I hope that you guys have really enjoyed
this series on reducing your risk, maximizing your returns, and achieving financial freedom. The goal after you buy these properties as
then to have them paid off over time, either through the cashflow of the property or you
can pay them off faster yourself through things like side businesses, investing in properties
where you’re going to get equity that you could sell, and then pay them off. It’s up to you how you go ahead and do it,
but I hope now through this series you can see that it’s not that difficult to go out
there and invest in property and actually achieve that longterm financial freedom. And I hope you feel inspired to go ahead and
do that. If you’re interested, Ben and the team over
at pumped on property are offering free strategy sessions to you guys. So if you want to jump on the phone with them,
talk about your situation, where you’re at now and get really clear as to what your goals
are and what your next steps need to be in order to order to achieve those goals. Then a strategy session is going to be awesome
for you. It’s just going to really get the ball moving
because often people just get so stuck because they don’t have that personalized advice. So strategy session’s gonna really help with
that. So go to on-property dot com, forward slash
session to book a time with them and I’ll leave the links to that in the description
down below as well. If you then decide that you want to work with
a buyers agency at pumped on property, you can go ahead and do that. They can find the high quality suburbs and
the high quality properties and help you purchase them, or you can take their advice and then
that’ll just leap frog you and you can go and do it yourself. So it’s a really great offer. Again, that’s on property.com, forward slash
session and the link will be down below and just thanks so much for doing this series
with me. I think it’s been really good. I think it’s going to be really helpful to
people out there. No problems. Thank you so much for having me here and I
just wanted you to know like if you are just getting started now, I’m so excited for you. It’s such a cool stage of life and it’s such
an insight, an exciting thing to be doing and I wish you all the best with whichever
way you go and I hope some of the things in this video set you up for your future success
and freedom that so go out there, make things happen and go and achieve your dreams and
financial freedom. Be the best version of yourself you can be. Live your truth, be yourself, add value to
the world. We’re really excited for your journey and
we’re really excited to hear from you and hopefully do a strategy session with you guys. So that’s it from us. Hope you like this series and until next time,
stay positive.

2 Comments

  • Dave Colwell

    Great content guys. I really appreciate all of the down to earth info and reference links to the websites you guys use. I expect that there is a stack of people that have received value from the time you have put into these videos and not left a comment, so on behalf of myself and all of them thank you for giving back and helping families to get ahead and avoid potholes, you're making a difference in peoples lives.

    I loved the comment about loving to talk about money and others being uncomfortable. I LOVE to talk about this type of stuff and many people around me, especially my family, react as though I have a mental condition and go quiet lol.

    Keep being awesome! Dave

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