Smart property buyers work on stats not assumptions!
A property gives you not just a home, it can also be a great investment opportunity. To many Australians, property investing is a great way to reach financial freedom and secure their family’s future – but one question many home buyers and new investors have is: how do you know if a property has a great potential for growth? Where do you find such properties?
Should you buy a 3 bedroom house in Melton like Jim down the road who swears it’s the next growth hub?
Or do you buy an apartment in a trendy area like South Yarra or Prahan because you think it’s a safe investment?
Many people resort to the following methods when it comes to choosing an investment property:
- Asking friends and family
- Buying in an area they would want to live in
- Seeking advice from property ‘experts’ and/or joining an investment club
- Relying on what a real estate agent has told them
Whilst some people get lucky with these methods, all of these ways are pretty “hit and miss” as they are often based more on a ‘gut feeling’ or a person who’s just trying to make a sale, rather than actual facts.
How does an experienced investor go about finding their next investment property?
Smart property investors evaluate their next investment based on actual facts, rather than just a gut feeling!
In this special blogpost, I’ll introduce you to two property reports: Essential Property Report and Comprehensive Property Report. I’ll explain what these two property reports are about and how to use the data contained in them to your advantage as a property investor, home buyer, and a vendor who looks to sell a property for a good price.
As wise man Francis Bacon so succinctly once said, “Knowledge is power”. In real estate, ‘property knowledge’ can make the difference between a costly mistake and a bonanza investment.
Essential Property Report
First time investors and home buyers love using the Essential Property Report to give them an idea of the price they’ll need to pay and find the ideal location of their dream home or investment property.
The Essential Property Report can offer you information on a specific property, such as:
- Historical sales data of the property
- Essential features of the property
- Recent, comparable sales in the area
- A suburb snapshot including median price and capital growth
- An estimated value for the property
An essential property report collects data from various sources to provide a summary of what’s been sold in the area recently that is comparable to the property you are interested in. It provides an estimated value and price range for the property you’re looking at based on:
1. The sales history of the property.
In most cases, the sales history goes back to when the property was first built and sold (if recorded):
- Last sale date and price
- Year built
- Property type
- Essential property features (bedrooms, bathrooms, car spaces and land size etc.)
2. Recent sales of properties in the same neighbourhood:
- Sale price
- Sold date
- Land size
- Property attributes such as number of bedrooms, bathrooms, garage, land size
3. Property statistics on your suburb:
- Last 10 years of house/unit sales data
- Capital growth potential
How can a property report help you make a more informed decision?
These reports provide the same property information used by real estate agents, banks and analysts in the property industry – except now you have free access to that valuable information to decide what to do.
As well, it’s always useful to have actual data to back up the claims of a real estate agent to make sure they aren’t pulling the wool over your eyes!
If you’re a home buyer or property investor
Whether you’re at the researching stage or have found your dream house, the data in the property report can be used to help you work out:
- What a property is really worth;
- What else is on offer in the area you’re interested in;
- What price you may need to pay to seal the deal;
- The potential growth opportunities; and
- Whether you will generate the returns you are after.
Using a property report price range, you can confidently negotiate with the real estate agent, knowing you’re paying the right amount.
If a property report comes up with a price range outside what you can afford, you can save time and stress and start looking at properties that are within your price range.
For example, if you’re thinking of going to a house inspection and the house is advertised for $560,000 to $600,000 but the report is saying a price range of $650,000 to $700,000 – DON’T WASTE ANY MORE TIME! Many real estate agents will underquote in order to get more feet in the door at the inspection – it’s unethical but many agents still do it. Spend your time instead going to an inspection that might actually result in you getting that investment property of your dreams!
It also helps with your loan strategy
Based on the data in a property report, we will know if you have access to equity to buy another property.
If you have borrowed money in the last 5 to 10 years, the property report will show the value of your house and how much you owe. If your loan amount is under 80% of the value of your house, you have a great chance of getting a good deal on your mortgage. On the other hand, even if you are borrowing more than 80% of the value of your home, this can still be the ideal structure – a structuring session with our mortgage strategist Neil Carstairs is key to working out whether this is the case.
If you’re a vendor looking at selling your property
Having a property report will mean you have a more realistic idea on:
- Your property value;
- What price you may get if you were to sell tomorrow; and
- The potential growth.
So if you want to sell your house for a higher price, then you can get an idea on how much work and money you need to put in to increase your house value through renovation.
Having a property report to provide you with an estimated value and the data to back it up can also allow you to confidently judge and negotiate with a good real estate agent and see if he/she is honest with you about your house value.
Comprehensive Property Report
Loan Structuring Strategy
Before thinking about getting a comprehensive property report, the first step for a property buyer is to get their finance sorted to work out what price range they can afford so they know where to look.
Seasoned property investors will discuss their investment goals with their trusted mortgage broker and accountant, and plan ahead first. Proper planning and having the correct loan structure is the key to setting yourself up for a smooth investment journey.
Many first home buyers and new property investors get very excited about a property and get caught up with the features of a property as if they are about to move in. Some of them even make the mistake of going to inspections without having their finance approved.
The result? They waste their time and don’t get the property of their dreams because they can’t actually borrow the amount they need, or worse, they pay too much for the wrong property that generates less than the desired rent or capital growth.
It’s essential to get a written pre-approval done so you can make an offer or bid at an auction with the confidence of knowing that the bank will lend you the amount they specify on the pre-approval letter.
For any property buyer who comes to Mortgage Corp asking for a loan, we always start with a Loan Strategy Session reviewing their current situation and future goals. Once we get them a written pre-approval – which usually takes much less time than most people expect – we discuss and offer them tools that will help them with their property hunting and purchase.
We have access to the same, advanced tools banks and real estate agents use to research property prices, comparative sales and rentals. One of these tools is a Comprehensive Property Report which is a detailed report that goes much further than the Essential Property Report.
It contains more information to allow you to make better decisions about the property. It looks at not only market sales data, but also more in-depth and varied information about the property itself, comparable properties in the area and the suburb, including:
- More particulars about the property you are interested in such as key selling points
- Other properties currently on the market similar to your requested property
- Rental data for similar properties in the area
- A demographic snapshot of the suburb including whether it’s a suburb with predominantly renters or owner occupiers, and household income
- Market trends in the suburb you’re interested in, and the wider area
Equipped with all the data, you’ll have an idea on:
- If the property you’re looking at is a good investment or not;
- The amount of rent to expect;
- What sort of renter you may get, which can also help you decide whether to renovate and/or furnish the property; and
- If you’re currently renting the house – whether to increase the rent.
For example, if a real estate agent tells you that you can get $400 pw in rent, but our property report comes back with only $350 pw rent this will:
- change your expected investment income, which will in turn
- impact on your borrowing capacity.
In other words, you may not be able to borrow as much. So with the data, you’ll have a more realistic idea of how much you can borrow, so you don’t waste time looking at properties that are out of your price range.
Examples of the types of searches we can do for you:
- if you’re an investor, once you loan is pre-approved and you know a 3 bedroom, 2 bathroom, double garage home in a particular area is a good rental property, then Mortgage Corp can get you a Comprehensive Property Report that will show you all of the properties with those features on the market and find out what price they were sold for in the last 20 years. This can help you work out whether there are other, better properties on the market or how much to offer for the property you’re interested in.
- if you’re looking at selling, we can get a list of all properties within 1, 2, 5, 10 kilometres of your house with your home’s features (e.g. 3 bedroom, 2 bathroom, single garage and 750 square meters land size) and how much they were sold for. This will give you an idea of how much your house is worth and whether there’s potential growth opportunities.
Start investing SMARTER today with a Free Essential Property Report from Mortgage Corp and take the guesswork out of property investing.
How to request a free property report
Essential Property Report
If you’ve found a property that you like, you can request a FREE Essential Property Report on that particular property as well as the suburb stats.
When you request an Essential Property Report. Don’t forget to include the address of your ‘dream property’ and we’ll email you the report to the email address you’ve provided on the form.
Note: reports are for properties in Victoria only. For other states, please send us a request via our contact page.
Comprehensive Property Report
In order to access the Comprehensive Property Report, we need to ensure we’ve got you a written pre-approval, as it would be a waste of time going through all the details of properties if you don’t end up getting your finance approved. Enquire about the Comprehensive Property Report here.
When you meet with your Mortgage Corp loan specialist, he/she can also guide you on what type of property information you should be looking for and how to interpret the data so you can make your own educated decision.
About Mortgage Corp
Based in Mount Waverley, Mortgage Corp is the most loved mortgage broking firm in Melbourne with consistent 5 star customer reviews. Mortgage Corp specialises in helping successful professionals and property investors maximise their return and strategically structure your loan for long term investment success.
While most banks and brokers focus on merely getting you a loan, Mortgage Corp is committed to getting you a comprehensive investment result. Request a Free Loan Strategy Session with our senior mortgage strategist Neil Carstairs today!
Mortgage Broker’s service is free, why not get a good one ? Mortgage Corp consistently receives 5 star customer reviews!
About Neil Carstairs
Neil is the founder of Mortgage Corp, an active property investor and awarding winning MFAA accredited finance broker with more than 10 years’ mortgage broking experience. Currently, Neil is one of only 19 MFAA Certified Mentors in VIC/TAS region.
He is known for his strategic approach to investing and ability to reach fast, successful outcomes for clients where his industry peers could not. Connect with Neil on LinkedIn.