When you type ‘property research’ into google you are hit with almost 1.4 trillion results and as you can probably guess, not all of this information comes from reliable sources. Upon further investigation, you will notice many of the sources are in conflict. This is something we call the noise, an endless amount of market insights often reliant on sentiment and copy paste reporting.
Research is important when investing, it empowers people to make informed decisions and create wealth. Sadly, many investors rely on these questionable sources to understand property markets and unintentionally create ineffective portfolios. First time investors can be drawn in by such tips as property ‘hot spotting’, and ‘this month’s upcoming suburb’, taking it as gospel. The abundance of web research can cause confusion for hopeful buyers, leaving them with a wrong idea of what data is relevant.
It’s imperative to have a research process that will home in on the most important aspects of a market before purchasing. This includes understanding key drivers within a macro market, due diligence on the asset’s background and market value among others. At Blue Wealth our process includes a long line of assessment from the acquisitions team, all the way to project approval by our research department. Our methodology is a stringent ‘micro and macro’ approach, which over 2017, we rejected 90.7% of projects. Approved properties must pass various research steps before they make it to the table for any of our clients to consider.
Research Methodology
Our independently audited research model gives an accurate insight into the strength of a markets growth and cashflow prospects. The research model takes an economic approach to weigh up the drivers of each property market, while rating the cashflow return generated. We analyse key aspects such as; Population and demographics; Economics and Employment; Infrastructure investment and Supply and demand. These elements regularly driver the demand for property and ultimately create an uplift in asset prices.
Any property that rates lower than a 7 out of 10 is immediately rejected by our model, those that are below 8 are to be reconsidered by the team. This market research gives a comprehensive understanding of a market’s long-term growth prospects. This is one of the most significant advantages that Blue Wealth clients have. Our team of professionals ensure that they are buying into markets with strong economic drivers, which subsequently create long term demand for property.
Deep Value Analysis
We then take a scientific approach in understanding if the project is priced to market value. This includes a thorough value analysis; whereby comparable sales are used to find a succinct value per external and internal space. This is in consultation with independent valuation firms to understand the real value of each project. Often understanding the true value of a property can be one of the hardest steps within a cyclical market. Purchasing properties on or below market rate, aids clients in accelerating capital growth and expanding a larger portfolio.
Negotiations
One of the strongest points of Blue Wealth’s property acquisitions process is the ability to negotiate advantageous positions on behalf of our clients. We liaise with vendors to create better investment opportunities for our buyers. This can mean the advent of off-market inclusions, a process that isn’t available to investors relying on their own purchasing power.
Our research ensures that we find the hard facts about a property market, rather than just follow the sentimental noise of the media. We take a methodical approach in analysing each asset we present to Blue Wealth clients. This primes us to deliver approved properties that perform strongly over the long term.
