Like all good real estate investors, we know the value and importance of doing due diligence. Whether you're building from scratch, doing a renovation, or investing in a property to buy and keep, there is a lot of research to do before signing a contract or paying a dime.
We are a 27-year-old family business, so we have been there for a long time. As investment specialists, when we start looking for our next land acquisition to build on, we spend a lot of time researching the fundamentals of the market.
We are most active in parts of southeast Queensland such as the Gold Coast, Logan, Brisbane, Ipswich and Beaudesert, as well as the main center of the Mackay resource industry, but whatever be the location, we know how important it is to see where the money needs to be invested or already spent on large infrastructure projects.
Key development projects such as roads, new schools, shopping malls and employment hubs all point to areas of potential growth. But these are not the only indicators of a smart place to buy your next investment property.
When we are looking for where to develop our new homes, we look at the big picture. For example, are there lifestyle attributes that complement infrastructure spending, which will not only attract people to the area but keep them there?
Good tenants want beautiful homes to live in, but they also want convenience and a range of amenities that they can enjoy on a regular basis, whether it's malls, schools or leisure facilities.
When we search for our next development site, we also take into account the potential for growth, because the areas which could now be entirely new could easily one day become important centers of life and employment. .
Building, on average, a new home every day for 27 years, our company has focused its efforts on areas with many advantages, offering an affordable entry level to investors for growth. long-term capital.
For example, we were one of the first to build around the Horizon Park, Forest Lake and Springfield Lakes areas in Queensland in the late 1990s and early 2000s when lots of homes and land sold for less than $ 150,000.
Key development projects such as roads, new schools, shopping centers and employment hubs all point to potential growth areas
At the time, the real estate market was starting to heat up and Brisbane was becoming a capital – but not everyone wanted to live in or near the CBD. Areas like Forest Lake and Springfield Lakes offered excellent value for money and had a number of infrastructure projects at stake, including upgrading the Centenary Highway in Brisbane.
Again, seeing roads, schools, and shopping malls being planned in or near a target area is always a good sign, as it indicates that people who make big decisions Investing large sums of money expect an influx of residents.
Coomera on the Gold Coast is "one of the fastest growing regions in the country", says Knight
In the early 2000s, we started building investment houses in Coomera on the Gold Coast, where the area was largely underdeveloped.
Coomera has been and remains, in our opinion, one of the fastest growing regions in the country, providing solid capital gains and high rental yields, and we see this continuing for many years to come.
As land becomes scarce, there are still many opportunities in smaller subdivisions, and the scarcity flow effect means that demand will continue and drive up prices.
With the Gold Coast located between the two largest cities in the state, offering easy access to both, numerous schools and shopping centers, and some of the most beautiful beaches in the world, demand is not not just driven by the fundamentals but also by lifestyle choices, and when emotion plays into people's decision-making process, this adds a very strong reason to live there.
Identifying a ripe suburb for profit construction
We are looking for what will deliver the best long-term value to our customers, rather than what is currently in vogue, and there are still many opportunities in southeast Queensland that are not CBD-centric .
Indicators such as interstate migration play a key role for us when looking for our next acquisition of land.
We continue to see strong migration from the southern states, thanks to the affordability of housing in Queensland, an excellent lifestyle and a favorable economic climate, especially in the southeast of the state.
Brisbane posted the highest net internal migration gain of any capital in 2017/18, ahead of strong markets such as Melbourne and Hobart, most of which came from the state or Sydney.
People move here to take advantage of an opportunity to create a new life for themselves, and most will choose to rent in an area with access to infrastructure that will make their lives easier.
Just look at the Logan-Brisbane growth corridor, which we have reserved as an area to watch. The population is expected to almost double, from 313,800 to 586,000 in just over 20 years, according to the South East Queensland Economic Foundations Paper, prepared by the Queensland government in January 2018.
It is not only the state government that spends money in these regions; local councils are also carefully planning this expected growth, and these are the places we consider to offer the best value for us as builders and, in turn, for our customers as investors.
As an example, the $ 512 million Logan improvement project was completed at the end of 2019 and included the widening of the Logan and Gateway sections of the highway, Improvement of key congestion hotspots and construction of new south-facing access and stop ramps on the Gateway Highway, a main artery bypassing Brisbane that facilitates access between the Gold Coast and the Sunshine Coast.
The suburb of Park Ridge in Logan will be transformed with a network of new transportation infrastructure, including road connections and trails to cope with more traffic due to the addition of two new subdivisions.
The Park Ridge connector has also been identified as an area to be reserved by the state government for a transportation corridor that will link the planned future communities of Park Ridge, Flagstone and Yarrabilba to services and ;employment.
Although a new road is not necessary for 20 years or more, the state government has stated that it is important to preserve the corridor now so that a development denser can be assured in the future.
Because of this infrastructure, proactive advice and many lifestyle attributes, we consider this area to be just as important as we have done in suburbs such as Forest Lake , Springfield Lakes and Coomera about 20 years ago.
New infrastructure projects create new jobs and stimulate the local economy by attracting more people to an area, who in turn spend money on local businesses and help stimulate demand for local goods
The next location for the construction boom?
We have a dedicated internal research team that continually reviews the fundamentals of the locations for their next land acquisition, and this due diligence has taken us to central Queensland.
We have invested heavily in the city of Mackay, as Queensland's mines and related industries have added billions to the state's economy in the past fiscal year.
Knight identifies Mackay in central Queensland for investment, due to his employment, business and development opportunities
It is no secret that central Queensland has suffered from the slowdown in mining, but regional cities like Mackay are not dependent on a single economy as much as many. 39; others.
Mackay not only benefits from the rich coal resources in the west, but is also one of the largest sugar producing areas in Australia, as well as a hub for the western sectors. Education, health, aviation and tourism.
Just over an hour's flight from Brisbane Domestic Airport, Mackay takes advantage of growing employment, business and development opportunities and is a place of business. 39; investment in which we firmly believe.
Here's what Choice Homes recommends when considering a new investment opportunity:
Follow the basic principles
New infrastructure projects create new jobs and stimulate the local economy by attracting more people to a region, who in turn spend money on local businesses and help stimulate demand local properties because more people want to live there.
Look for solid surrounding infrastructure projects that are already in place or that will be developed in the near future. These include new schools, nurseries, hospitals and transport networks.
Go for growth
Look for areas that expect high growth over the next 20 years.
Strong long-term investments that offer good returns and capital gains are not built in the short term. Areas located on the margins of capitals or connected to other regional or satellite centers are still worth examining.
Find out if the boards or the government are planning growth with improved road networks or the release of new land developments.
Buy new
Buying a new property rather than a used one can offer a number of possibilities for tax depreciation (see box below).
The new property offers builder warranties which may not apply to older buildings.
Find out if there are employment opportunities nearby. Business or enterprise parks are good providers of jobs, as are large corporate offices or government offices
Search for retail and entertainment
Look for areas with good options for recreation. Families are looking for places with well-equipped sports facilities, parks and a range of recreational choices.
Areas close to shopping centers and multiple outlets will also be more attractive to tenants.
Identifying the employment centers
Find out if there are employment opportunities nearby. Business parks or business parks are still good job providers, as are large corporate offices or government offices.
Small businesses are key job providers and a driver of the Australian economy. Regions such as the Gold Coast and Mackay are home to small businesses that employ people and spend close to home, which drives the local economy.
Troy Knight is the CEO of Choice Homes, winner of the Investor of the Year Investor Awards for Developers and Builders category 39; year 2019
Disclaimer: The advice in this article is for informational purposes only and should not be considered financial advice. Please be sure to speak to a qualified professional before making any investment decisions.
