What needs to be considered by investors when they are seeking out the right property to purchase? In this article we ask JO VADILLO from Advocate Property Services to explain some of the strategies she uses when advising her clients on choosing properties to add to their investment portfolio.
Working with property investors as a career choice means we often get exposed to some very well thought out ideas, strategies and plans. As people who love property, talking about it everyday puts a spring in our step.
When we sit down with an investor and gain a full brief and understanding of their objectives the buying budget is top of the list. It is quite clearly the number one starting point in the quest to buy property.
Then we have the extensive wish list with a mix of non-negotiable factors and other ‘nice to have elements’.
A list that looks a little something like this:
- Cosmetic renovation to add value
- Something that can be subdivided
- Within 10kms of the city
- Good rental return
- Nothing with asbestos
- 3 bedrooms and off street parking
- ….and so on
Then you get the property buyer that adds, we would like ‘something that we can drive past’.
It’s the drive-by investment strategy that leaves me scratching my head.
This philosophy for investors is not exactly a step toward a sound investment.
If you are about to undertake renovations the short trip makes sense for a very small window of time in your property ownership cycle.
On the other hand you could also outsource any renovation project task to local professionals that will be faster and will probably do a better job.
Now back to the investor, who thinks that it is a good idea that they can randomly drive past their property to check on the tenants or ensure it is still standing….
There is no geographic gift that guarantees a drive-by property will ensure a good tenant or a good investment decision.
There are so many factors that need to be considered when buying a property and the ability to have a short detoured drive-by isn’t necessarily a good one.
You need to consider whether it is in a growth area, is there low vacancy, good proximity to local amenities, can you afford it and does it lend itself to being a viable part of your growing property portfolio?
The drive-by landlord strategy doesn’t guarantee capital growth either. Depending on where you live it can also delay your property portfolio from growing at all.
Your tenants are protected from requests for short notice access, as they are entitled to live freely and comfortably without micro management.
If you feel you need to see your property then really interview the local property managers to see who is fit for the task.
When you invest in a good team to help with your property portfolio you can expect quarterly condition reports, expect that they be connected to reliable maintenance teams, and get multiple quotes for any tasks.
Landlord insurance, well covered insurance, will also save on your drive-by fuel consumption.
Buy the property for the merits of growth, not vanity, not convenience but good long term growth!
About Jo Vadillo:
Jo Vadillo is the owner and Director of Advocate Property Services Pty Ltd. She works with investors and homeowners to source new and existing properties that meet the best investment credentials to build a prosperous property portfolio for their clients. Jo is also a Board member of My Property Circles and runs Property Women, an organisation aimed to educate women on their journey to property success.
Jo is an author, mentor, public speaker, fierce negotiator and a terrible cook. When not immersed in her own property dealings and that of clients, Jo and her husband Greg are big travellers and go everywhere as an entourage with their 3 young sons.
General Advice Warning: The advice has been prepared without taking into account your objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of these objectives, financial situation or needs, before following the advice. We recommend that you speak to your accountant and financial adviser to help you determine whether direct property investment is right for you.