I am often asked by our affiliate vendors, referral organisations and property investors what researching investment properties involves and how it is we go about determining whether a particular property in a particular area is worthy of long-term investment.
Long-term investment is absolutely essential for 99.9 per cent of property investors (including myself), yet most property investors fall short of maintaining a long term outlook. There is no doubting the RP Data statistic that shows you are ten times more likely to double the value of your property investment if held for more than ten years as opposed to the short or medium term.
So what type of property investment is suitable for a short or medium term outlook? The dangerous kind. We have seen the investors in regional mining areas that were making a killing only a few short years ago, but those strong gains were not to last forever and in most cases, those investors have taken a significant hit. Speculative behaviour in any investment market is a dangerous and typically fruitless endeavour.
What therefore needs to be established is twofold:
1) The information on potential property investments needs to be relevant
2) The interpretation of that information needs to be relevant
The property market is so flooded with ‘research’ in the knowledge economy that the true value of information has been lost. Check every marketing brochure of every investment project in Australia and you’ll find investment data and graphics. What is important is the way the relevant data is interpreted, and what that tells you about the tomorrow of the property you’re purchasing today.
The First Link Property approach is to follow our 5 P’s: People, Politics, Productivity, Performance and Place; but our job doesn’t stop there. From the point of collecting information, we then must interpret the information, compare it against the other information, consider both the qualitative and quantitative aspects and eventually pass on recommendations to our affiliates.
Next time you’re checking out some property investment research, ask yourself one simple question:
What does this actually tell me about how my property will perform over the next fifteen years?