Some of the methods we employ to shortlist great properties

Earlier this week, I was asked by a client, “Cate, how do you and your team shortlist my properties?” Our client was wondering how there are so many out there, yet we have just provided her a detailed list of only two properties that meet her criteria.

Is her search particularly fussy?

No, not at all. Her search is targeted, realistic and feasible.

Who do we work with?

We assist both investors and owner occupiers. While there are many differences to each approach, there are also some fundamental similarities. One of which is the key attribute we look for…. a property that has strong owner-occupier appeal. After all, there is no merit in selecting an investment that won’t hold future appeal to the most emotional segment of the market; homebuyers.

Whether our investors wish to apply a ‘buy and hold’ approach, or seek capital gains one day with an imminent sale, we want their property to perform well. To grow in value. Other similar sales during their tenure will reinforce the growth that their property is experiencing. Each sale price is a data point. And each sale that signifies capital growth reinforces the performance of their asset over the years.

Back to the question; our client was wondering why I only shortlisted two properties, in a sea of more than 400 properties in her search locale.

The importance of the brief

I start with a firm brief. Our strategy session entails a discussion about growth, cashflow, holding costs, maintenance preferences and social/demographic preferences. From there, we can shortlist dwelling types, broad areas and amenity options. We then focus from macro to micro and determine a criteria set; divided carefully into ‘must-haves’ and ‘nice to haves’. Our search is reinforced against recently sold options that feature all of these attributes, affirming the budget vs criteria.

Once the strategy is finalised, we contact all of the agents in the local area we’re targeting. While we also search online comprehensively, we like to identify suitable off-markets and pre-markets for our clients. Agents also give us insight into the campaigns they are running, and whether any are struggling and potentially offering great value for our clients. Every now and then, an A-grade property campaign can be running well and suddenly have an unfortunate twist in the last week. Buyers can drop out of the race unexpectedly, and without the tip-off from the agent, we may miss the chance to purchase an A-grade property for a great price.

Shortlisting

Our shortlisting takes into account the must-have criteria. If it doesn’t have it, it’s not on the list.

First, we look at the encumbrances. From flood overlays to easements on titles, zoning issues and specific heritage items, we have a list of title-related concerns we avoid.

Next, we focus on the quality of the street. Is it a good street? Is this part of the street appealing? Streetscape counts for a lot. How is the street parking? What is the character of the houses in the street? Is the unit to house ratio too great for my likes? We don’t like to purchase houses in streets with a high proportion of units. Are the neighbouring properties nice? Can we identify any overshadowing? Is the yard private?

Then we focus on any negatives in the area. From air traffic noise to road noise, rail noise to high voltage powerlines, we even canvas nearby, run-down properties, or neighbours that could potentially spell social disturbance. All of this is done online, with great tools, combined with a lot of google Streetview exploration and satellite imagery.

If in doubt about any townplanning-related changes, we call council and chat with the duty planner.

We always consider the floorplan, the orientation, the condition, and the potential for improvement.

Lastly, we check in with the agent about the strength of the campaign, the availability of the property and the status of any potential offers made so far.

This is all before we pop the property on our clients’ list and book in our physical inspection.

Following the inspection, we have more checks and balances to conduct, including title boundary comparison to fence placement on satellite imagery. I cross check any required permits or approvals, trade certificates and relevant building insurance. We speak with Owners Corporation managers. We read through strata minutes before determining that a property is shortlist-worthy.

And this is all prior to our detailed pricing analysis is conducted.

Off-markets?

Our team receive an average of over 100-120 off-market properties per week from agents. Only two or three across our entire book of clients are worthy of consideration. Many are compromised or overpriced, (or both).

Our shortlist

Each shortlist only contains the properties that we deem potentially suitable against our A-grade property search criteria.

This is why a comprehensive search usually yields a small number of eligible options each week.