Avoiding the number one investor mistake INVESTORS OFTEN MAKE THE MISTAKE OF ‘BUYING FROM THE HEART’ AND, AS A RESULT, PAYING TOO MUCH. IF THE NUMBERS DON’T ADD UP, DON’T BUY. HERE’S HOW TO GET YOURSELF IN THE MINDSET OF A SAVVY INVESTOR. BY SMART PROPERTY INVESTMENT’S JENNIFER DUKE WWW.SPIONLIONE.COM.AU
“You know when the numbers don’t add up but you When researching a particular suburb, investors need go ahead and do it anyway regardless because to be looking for the benchmark sales for that postyou’re hoping and praying that one day this is going code and then benchmark sales for the street. to happen or that is going to happen, or this road is The highest and most recent sales in the area are going to be closed off or the interest rates will drop typical benchmarks, and from there you go about or whatever, so when you invest hoping and praying, finding an identical property, Mr Geizekamp says. “It that’s bad,” Property Secrets’ director Paul Giezekamp could be original, semi-renovated or unrenovated,” Mr explains.“What I always do as an investor is look for Geizekamp says.“For example, I’ve got benchmark the best sales in a particular street, and then the best sales in Leichhardt of $1.2 million, but I can find a sales in the postcode,” he says.“I then see if I can find dilapidated property at $750,000 and my renovation something similar as far as a dwelling that is $50,000 is going to cost $150,000 – that’s beautiful,” he says, to $100,000 under market value.” “instant equity.” Mr Geizakamp’s search for ‘best sales’ by postcode “In Western Sydney the benchmark might be $400,000, effectively means finding the highest prices achieved and if I can find a dilapidated property for $280,000 in that suburb, and then using those sales as a and spend $50,000 on a renovation, it’s the same benchmark for what he is looking for in an invest- principle – instant equity.” ment property. Using data from trusted research houses such as Benchmarking, Mr Geizekamp says, is a way of under- Australian Property Monitors (APM) and RP Data, standing valuations in a market and, by using recent investors can find information on recent sales and sales as a guide, looking at how much equity can be identify benchmarks themselves. However it is imporgained by purchasing under that value. tant to cast a wide net when looking for instant equity. “When you think of golf, you think of Tiger Woods, when The more properties you consider, the higher your you think of tennis, you think of Roger Federer, “Mr chances of securing a deal below market value. Geizekamp says, “they are the benchmarks and they are the best.”
DUO INVESTOR’S GUIDE TO TOWNSVILLE 99
Published on May 31, 2013
DUO Magazine is North Queensland’s very own luxury lifestyle publication. Now in its seventh year, the independent glossy has secured a plac...