How To Assess Street Appeal and The Surrounding Area – Inspecting a Property (Part 2/4)

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You need to look at the street and surrounding areas to know whether or not you need to invest in a property. Here are some tips on how to assess the surrounding area of a property. Book Your Free Strategy Session

Resources Related To This Episode

Inspecting A Property Series

Part 1 – Questions To Ask A Real Estate Agent 

Part 2 – How To Assess Street Appeal and The Surrounding Area

Part 3 – How To Inspect The Outside of a Property

Part 4 – How To Inspect The Inside of a Property

 

How To Find The Best Properties in a Suburb

Investing With an Owner Occupier Mindset

Transcription:

When it comes to inspecting a property, not only do you need to ask the agent questions, inspect the outside and inside of the property, but you also need to look at the street as well as the surrounding areas to see what it’s like. So in this episode I’ll go with me, Ben Everingham from pumped on property and we’re going to be talking about this aspect of inspecting a property which is looking at the street and surrounding area. So I think it’s super important. Some of these stuff can be done on your computer at home before you get out there and some of it is really that touchy feely stuff that you need I think is really important. Before you actually buy. You have and so me and ben actually did a video on how to choose the best property in a suburb, which I will link up in the description down below.

But that really talks about a whole bunch of this sort of stuff that you can do online. Like talking about distance of high schools, primary schools, bus stops, train stations, all of that sort of stuff. You can do that easily from your desktop online and so you would kind of do that first and now we want to talk about what to do when you’re actually at the property in person 100 percent. So we’ve got a bunch of different questions that you ask your team ask when they’re looking at a property. So we’re just going to kind of work through some of that. The first one being an important one is, is this property on a main road? Now? This is one that you should be able to tell from Google maps, but not necessarily when you’re in the area. See the traffic and it becomes a lot easier.

So we, the reason we don’t want to buy and main roads is, you know, when there’s suburbs with $400,000 on average, maybe you can buy a house on a quiet street for 400 k and the house on the main roads with $390,000. But as the properties values go to a million dollars or $2,000,000 in 30 years time. Um, the difference between the main road and a and a quiet street can literally be half a million bucks. So it’s really, really important to remember that for future capital growth and that’s why he asked that one and the next one is, are the houses in the street well maintained? So that’s also something hard to find out. You could use Google street view, but being there in person and just getting the vibe of the street, looking at your neighbors, looking at the other houses in the street, how well areas maintain, gives you an idea of how many people in that area, uh, owner occupiers, how many are going to be improving their properties, what gentrification is happening, all of that sort of stuff.

What exactly is it that you guys look for? It’s like that’s a touchy feely one. And again, like it’s, I look for what he wants. That’s, you know, how many houses in the schrager renovated is another thing that we’ve looked for. But how, how many people are actually taking care of their cars? How many people are taken care of their lawns, you know, what are the gardens look like in the gardens in decimate grader? Are they owner occupier? What’s just the general sense of the neighborhood? Because as Ryan said, gentrification is absolutely key for people to pay more in the future. We want a higher percentage of annual occupiers with surplus income, spending money on their home and that is what pulls up values long term. What do you think about, because I’ve heard people talk about, I believe that buying in an area with a high percentage of owner occupiers kind of increases your chance for capital growth because everyone cares more about their property as well as there’s obviously an occupier demand in that area, which are the people that you’d want to sell to that are going to be the emotional buyers that are going to push the price up, but then there’s other flip side.

Other investors talk about where they want areas that if there is such a high percentage of owner occupiers, they worry that they’re not going to rent their property. That is the sheep it opinion I’ve ever had in my life life. Today’s people who was saying that an area with a high end or occupier percentage is a bad thing. Honestly, that is just the worst infected and I was like, oh, I know that you’re bringing it out for a good reason because I hear this all the time like people are looking for areas with cloud percentages of renters. We helped develop a cam to us last week and brought us six paces of off market land close to Brisbane city in a suburb with seven percent renters. 80 or 90, what? Two and a half 93 percent owner occupiers. That is the drain line. That is if every suburb that I bought it had 99 percent owner occupiers, that would be my dream.

I don’t care about vacancy. I care about capital growth and generally in the suburb where there’s such a high percentage of owner occupiers, prices are higher. It’s harder to get. People still aspire to live there, but there’s no properties for rent. Like on this sub we’re talking about, I think there’s three properties on realestate.com right now or renting for a massive cranium and they look rubbish compared to what will be able to, just because you know, there’s, there’s no stock on market. So. Yeah. And so that’s. I did want to bring that up just to clarify with people, when you’re looking at census data or whatever it is you’re looking at, percentage of unoccupied doesn’t. If there’s a low percentage of renters, it doesn’t mean people don’t want to rent in the area, less rental stock available and so getting in an area that has a high percentage of owner occupiers means there’s less rental stock and available and so that can be a really good thing, but obviously you need to check the rental vacancy as well because just because it’s higher and occupier.

If it’s got a huge rental vacancy 10 percent or something, then that’s obviously a red flag. But your vacancy rate, locate your percentage of owner occupiers as low as possible and your percentage of renters as low as possible. I’m more than happy to buy in suburbs up to about a 35 percent rental market because sometimes the closer you get to Sydney, Melbourne, Brisbane, save a day. Well, the closer you get to the beach side suburbs in those areas, the higher the percentage of renters just because there’s more investors speculating on capital growth, united’s area, so unfortunately that’s what you have to deal with and so you want to look at whether or not the houses on the street and well maintained, which is going to give you an idea of much the people in the area. I care about their properties and hopefully that’s gonna help you a property in the future and the area as a whole go up for sure.

Where would you live on this street? I’m unlucky numbers dude, but I get very emotional about my investments after I’ve logically ticked him off. So I went for a drive on the weekend. For example, I know I said I wasn’t going to buy any more properties that so went for a drive there and I couldn’t see myself living on the street. I’m all in that particular suburb. And so I, you know, wasted three hours in my day going down and doing that, but it is worth getting emotional about this stuff. Did you pass on that opportunity? Are you still pursuing it? Fully passed it like these days. My intuition after I’ve done the numbers is the reason that the way I’m making decision, it would take you a lot as well. Knowing that you don’t want to buy much property and you like at the moment to actually find an opportunity and then I know I know you and how many like boxes that property would have to take for you to even make that drive.

I said what was it about, why wouldn’t you live there and why? Why was that a deal breaker for you as to whether or not you looked at that opportunity or passed on it? For me it was a corner block and one side was a very quiet street, but one side was a slightly busiest street in than I expected until I went and saw it. So playing that. Today’s rules engine is the house on a main road. Okay. You can throw the sheet, looked like a really small two lane road, one lane each way and I was like, that’s acceptable, and then I’d go out there and I’m like, actually this is the main thoroughfare between about two or three suburbs and as those suburbs get more populated that red is going to become busier. Secondly, I just looked at the quality, the houses in the area and you know, it was slightly further outside the city.

Then I would like to buy a lack when I can afford to. I like to buy within 20 k’s at the city because the data suggests that that performs better. So it was that in, you know, it was, it was just a combination of things that gut feel wasn’t. I would personally maybe into that property today sell sort of just avoided it. So it ticked enough boxers, but it had some things that you weren’t 100 percent on it and then you went there and your intuition told you that, no, this is not a good enough opportunity for me to overlook the other issues this property has. It was a great. That’s such a good question to. It’s, it was a great short term opportunity, but because I don’t think short term about anything I do anymore. Thanks to you. Everything is a longer term play now.

I don’t care if I can make 100 grand today because I know that property based on my intuition would have cost me, you know, half a million bucks over the next 20 years just because of that one decision to buy on that street versus a neighboring street. So yes, I apply all the logic and it looked great but then I still have to check it before I actually buy it and I’ve walked away from so many more properties and I’ve entered into for that reason and we did an episode as well on buying with an owner. Occupiers

can mindset as an investor, which is a great episode to check out too. So I’ll leave that in the links down below as well. So onto the next one is, is the house on the high side or the other

low side of the story? I read this, I was like, does that actually metal? And you’re like, yeah, it sucks. It, it matters. Um, I don’t understand why this matters. It’s just lucky we took them the shoes hills here we’re talking primarily brisbane that, that wasn’t a question that I ever asked for clients in Sydney because there’s no flooding issues, but there’s this perception because of the floods that we’ve had in the past in Brisbane, like you don’t buy the suburbs with the flags, you don’t buy the streets with the flooding issues, but the hot side of the street is a premium in Brisbane because since that association with the low side of the street and receive those less likely to flood because they were on the high side and people in Brisbane paid significant premium.

So the next one is what is the orientation of the property and what direction is

backyard fixing? This was never important to me until I built a house that was facing southwest. And Eva. Yeah, we’re in it right now. We’re in right now. We’ve just into it now because I’ve moved my family out of it, but it was nothing to me until I moved into it. And even on the sunshine coast, which is ridiculously woman, temporary life, beautiful, it’s just it was cold or winter and the kids were enjoying it because there was no sun in the backyard as ron would know, the backyards about three square meters. It’s not big, but it is just one of those things. It’s become more important and I actually only added it in after I did this this time and it’s important to me as an owner occupier, which means it’s going to be important to other people as well.

Yeah. And this is going to affect the livability of the property and how desirable the property is because the more light that comes into a property, people enjoy that and people like that. And so that makes it easier to sell your property as well as to bring your property. Again, it’s not a deal breaker. You can still get really great houses that have not as great aspects. It depends on the layout of the house and all that sort of stuff. But obviously if it has the north facing orientation or east, like they tend to be the better ones. Right.

Absolutely. And you made a really good point off camera, which is like a well designed home on a south facing blog can absolutely work. It’s just 99 percent of homes that are built up how design. So even there’s a lot of facing properties that a poorly designed that just don’t take advantage of. In fact, anything that was built, you know, older than the last two years. Orientation was just not really standing out

or even the house. The House that I live in has the north facing backyard, but what they’ve done is that the built above.

Yeah. Raj and blocked out all the sun from the north facing. And so it’s kind of annoying that you don’t get that sun because they just haven’t thought about it. That could have been so good in Australia. My wife talks about this space. I would just knock that down. I was like, that’s my office. You see? Right. But yeah, so important I think really important actually to an owner occupier.

The next one is how many houses on the street or renovated?

Look, we can probably bundle these last couple actually. Like how many owner? Rocky pause on the street as well. Gentrification is super important to me as a, as a really, really early indicator for how what a suburb could look like in the future and you know, you can think about these driving around Melbourne, Sydney, Adelaide, brizzy. There’s some suburbs that are just beautiful from start to finish. Every single property is been gentrified. Yup. Then there’s some suburbs next to those were one out of every two houses. He’s like that. Then some suburbs or one out of every three years. What gets me excited is when I say one person out of every 10 or 20 completely under, capitalized in a great area on their property. That to me is a really, really early stage sign that owner occupies, believe in the area enough to do something.

That crazy and example of this is some friends of mine. What about the other day? We were driving around in my neighborhood. We’re driving around where I live and then go home and look at these properties, look at how much these people, how much money these people have spent compared to some of the houses which are pretty original and these people are spending. That’s a really feel a home, not a million dollar house and lands like that’s. That’s a million dollar house when the person next door has got a house with 10 k, eight. If you were to build a $400,000 home, the overall value is just going to be exponentially higher. I love that stuff like I was. I get so excited about property, still did my thing and that’s the thing

what it’s asking the question, how many are renovated is kind of simplifying it. It’s really what you’re talking about, which is that over capitalization way, you’re seeing that this is an area where gentrification could happen in the future or is already happening, is that idea that the rising tide lifts all boats. So if you’ve got people overcapitalizing in an area making their property is worth more than what they should as an investor and then the more people that do that, then that brings a whole area standard up and cleans the price of the area or up and then your property that you buy, which you probably went over capitalize on because you’re an investor, but that will go up in value as well.

And is it disclaimer there if there’s plenty of people that make really stupid decisions in really bad areas that completely I’d be capitalized. What Ryan and I are talking about here is the CBA days of Australia or the, the cities of Australia, Brisbane, Sydney, Melbourne in particular, and then the side suburbs

associated with those markets, which is where I personally liked to buy. Um, you know, there’s plenty of people out into orbit that have spent a million dollars on time as well, right? It’s never going to get a return on it. That’s the thing. Before you’re doing this, you should have already done your market research. You’re southern research as well as how to find the best property in the suburbs. Just driving around looking for someone who spent way too much money. I’m going to buy the half door, so yeah, make sure you do all of that research beforehand, but that kind of covers things to look for in the area when you’re inspecting a property. So obviously some good stuff there about the main road, uh, whether the house on the street and well maintained, how many uh, renovated would you actually live there, etc. And so that finishes today’s video.

In the next video we’ll be tAlking about, I’m looking at the outside of her property and then we’ll go and talk about on the inside of the property if you want to say every one of these episodes on how to inspect a property, go to on-property dotcom, forward such inspect, and I’ll put all the videos down there so you can watch all of them and as well, check out the video that me and ben did recently on how to find the best property in a suburb which you should have done before you were driving around in a three hour drive down there and back in order to inspect it. So check that out. Don’t forget to subscribe to the channel. Until next time, stay positive.

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