02 Nov Reports you should always get and the ones you can trust – Kylie Davis
Some of the biggest decisions are where and what to buy, but doing your research and spending just a fraction of the amount you intend to invest can save you thousands and minimise the risk of making a costly mistake. Kylie Davis tells us about the 5 critical reports you should get.
Kevin: Making the decision to buy an investment property is really very exciting. It’s just a bit scary sometimes, too. We talk about research; you can actually over-research. Some of the biggest decisions are where and what to buy, but doing your research and spending just a fraction of the amount that you intend to invest can actually save you thousands and minimize the risk of making a costly mistake.
What reports should you be looking at? We’re going to highlight five for you today. My guest will take us through those, Kylie Davis from CoreLogic.
Kylie, thanks for your time.
Kylie: Thanks, Kev. Nice to talk to you.
Kevin: No doubt this is a question you’re asked quite often: which of the reports should I really be taking notice of? Which ones would you suggest?
Kylie: I think there are a few that we should look at. The first one is you need to understand is now the right time, or what is happening in the property market as a whole at the moment?
The best way to understand that is to look at a quarterly economic report to see what are the economic drivers that are affecting the property markets? Are prices on a property on the way up, or are they on the way down? What’s employment doing? What are the interest rates doing? What’s construction doing?
These things can set the scene for how the Australian market or how the market in your capital city is performing and give you an understanding of what’s likely to happen, because we all want to buy property and know that’s immediately going to go up.
That’s what we all hope will happen, but it’s often good to be alert and to understand is that something that’s going to happen in the next year, or do I actually need to buy this property now, thinking about what’s going to happen five or ten years out?
Kevin: We always cover those quarterly economic reports in our show, as well – a lot of excellent ones out from CoreLogic.
What about rental performance? How important is that, and where can we find out about that, Kylie?
Kylie: If you’re looking to buy an investment property, you really want to know what the rental performance is going to be, and so there are a couple of key metrics that you look at as part of an investment property.
You’re looking at the rental yield, but you’re also looking at what the weekly rent is going to be. You need to do that in the context of how realistic it is inside that suburb. You’ll often see inside data that a suburb might have an amazing rental return, but if there’s not much of a rental market in that area, or if the vacancy rate is really high, then sometimes those figures can be a little bit out.
So, the rental performance reports look at them across a lot of different criteria. They look at how big is the rental market in that area, is it a realistic rental market, what’s the yield, and how much is it returning, what is the median rent, how does that compare to the median price, and is the median value of the properties going up or down? You’re looking at something that’s trying to get capital growth as well as a good return.
Kevin: All of this data, of course, does actually show trends, doesn’t it? You have to monitor those trends, as well.
Kylie: Yes, it sure does. What you want to see is there’s no point buying a property that’s an amazing rental return if the capital growth is tanking out in that suburb. You could buy it, but you want to know that that’s what’s going on before you do it. You don’t want to find out after you spent an awful lot of money.
The idea behind the reports is to make sure you go in with your eyes wide open about what the situation is in that market, and a rental report will help you hone in on which suburbs you should be looking at to find the right property.
Kevin: I guess that brings us to the next one – doesn’t it? – getting down to specifics, getting right down to the suburb, as well, Kylie.
Kylie: Yes. Once you’ve worked out that you’re comfortable with where the market is at at the moment and you’ve identified some suburbs that you think are good rental opportunities, then you start to want to go right down into the fine detail of those individual suburbs.
The suburb reports will give you information on how the suburb is performing across a lot more criteria than just investment stuff. It’ll tell you where the median values are, what the capital growth has been over an extended period of time, and give you an understanding of the types of properties that are for sale in those markets.
Kevin: One of the things we have learned over the years, too, is that there is no one market in Australia. Even if you break it down into suburbs and then go into the suburb, you’ll find there are different markets even within a suburb. You have to really dig right down into the individual property level, as well, Kylie, don’t you?
Kylie: Yes. And I guess that’s the last report that you should buy, because a suburb on the whole can be providing a great return but it doesn’t guarantee that every property in that suburb is doing the same thing.
The best investments are made when you select the right property at the right price. So, once you’ve narrowed down your search and come up with a couple of properties that you really like, it’s worthwhile then going into a property report to see how long it’s been owned for, the age of the property, to get all of the details sitting behind that to make sure that the investment you’re about to make is not going to have any nasty surprises in it.
Kevin: Okay, there you go. There are the five reports that you need to be looking at, and Kylie Davis has taken us through those. Kylie is the head of content and property services marketing at CoreLogic and also heads up the CoreLogic reports. I imagine these reports are available at CoreLogic, Kylie?
Kylie: Yes, you can find these ones and a whole lot more. Some of them are free; some of them are paid for, but they’re all on the CoreLogic Report Store, CoreLogic.com.au/ReportStore.
Kevin: Good stuff. Kylie Davis, thank you so much for your time. We’ll catch you again soon.
Kylie: Thanks, Kevin.