How to watch the market like a pro: Mozo

Expert investors know where, how much, and the likely returns on a property – but there’s no reason why you can’t have that advantage

Finding a great property investment takes a lot more effort than simply showing up on auction day and buying a stunning house.

The expert investors aren’t necessarily looking for the most beautiful property – they’re looking for the one which will deliver an income and capital growth for years to come.

Mark Bouris, executive chairman of wealth management company Yellow Brick Road, says this means not only paying a good price for now, “but a good price for the 10 to 20 years you want to generate income from this property”.

“If you pay too much, you'll lose on capital appreciation and it will take longer to generate clear funds from the rent,” he says.

Bouris says the key is to do your homework and find the best area to purchase in at the best price.

“With an investment property, you are interested in a good location and access to infrastructure such as schools, shops, railway stations and playing parks,” says Bouris. He says that calculating average rents and yields in an area is also useful.

As the old property adage says, ‘location, location, location’.

To get the best return on an investment, it pays to watch local market and identify which way prices are moving and where they are likely to head next.

Steve Jovcevski, a property investment expert and home loan negotiator with comparison service Mozo.com.au, says that once you’ve identified a suburb, looking at the market on a regular basis can help determine whether you’re getting value for money.

“Look at what a property has sold for and make comparisons to another property in the same street or nearby area, seeing if it’s a similar size, or in the same condition, so that you find whether the market is trending upwards or saying static and you know what to expect price-wise,” says Jovcevski.

“If you’re getting a property at a similar price to what is selling up the road, at least you know you’re getting something that someone else is willing to pay for at that price.”

Websites such as Domain and realestate.com.au offer information on what properties have sold and for how much, while companies such as Australian Property Monitors and CoreLogic RP Data provide data on suburbs all across Australia that shows how prices, rents and yields in the area are trending.

Jovcevski says that keeping in touch with local agents can help you discover inside information on properties that may have sold privately.

Australian Bureau of Statistics data, including dwellings types, the percentage of properties owned by landlords, and employment stats, can help paint a portrait of how a suburb’s demographics are changing.

Once you’ve found a property, home loan comparison websites, such as Mozo.com.au, can help you find the best rate on the market. But Jovcevski warns that it’s important to get the best deal, but when you’re doing that look at your circumstances.

“It has to be the best rate to suit your circumstances because rates vary depending on your intentions with the loan – there’s all sorts of factors that come into it,” he says.

For information on property loans, rates and more, visit Mozo.com.au or click here for the free Property Observer eBook, Get loan-savvy – tips for a first time, investment or refinancing loan, which helps you decide on a home loan that meets your requirements.