In part 2 of our case study series with Serg and Bron we’re looking at establishing buying criteria.
This is an important step in the process as we want to ensure that we:
- Have a shared understanding of what we are looking for
- Make the most efficient and effective use of time in our location and property search
I’d already had some preliminarily discussion with Serg over the phone, but took the opportunity to meet with him in person recently, whilst I was down in Melbourne, where we further discussed the purpose of this property, the budget, the target location and specific features or characteristics that are important to him for this purchase.
Our ‘Project Brief’ document is brief in name and brief in nature and it aims to ensure that we are all ‘on the same page’ when it comes to what it is that we’re looking for. Serg’s requirements are fairly straightforward and he doesn’t have a lot of restrictions on what he’s willing to consider. This broadens our search a little, meaning we should be able to find a lot of properties that could fit the bill. On the flip side, it can also mean that we have too many properties and we may need to implement more criteria to narrow our search down.
So, as our starting position, here are the main points of our brief:
- The budget is in the vicinity of $300k to $500k.
- Our search will focus on the lower end of this range ($300k to $400k) initially as we may be able to look at purchasing a second property in the near future if the first one is in this lower range. We will present properties in the higher range if they meet the criteria and offer a good buy.
- The target location for the search is Mackay, Queensland.
- We will be conducting initial research and analysis to narrow down the suburbs and will discuss the outcomes and recommendations with Serg so that we end up focused on a selected target group of suburbs within Mackay.
- Both newer and older style properties, houses and units are within consideration.
- The main factors that we are looking for is a reasonable rental yield, with the property providing neutral to positive cashflow.
- It needs to be positioned in an area sought after by tenants.
- Needs to be a good position in relation to available services and facilities in Mackay.
So that’s the Project Brief. The next step is for us to do our research and analysis of the location, which will include both ‘desktop’ research and analysis, a field trip to checkout the best spots in Mackay and building relationships with real estate agents on the ground in Mackay.