12 Dec The top 100 markets revealed – Sarah Megginson
This issue of Your Investment Property features their Annual Top 100 to give investors a bit of an idea of where the experts are predicting we’re going to have the biggest growth in the year ahead. I talk to Sarah Megginson about what went into putting the list together.
Kevin: Well, the good news is that issue number 138 of Your Investment Property is out right now. Joining me to talk about what’s inside, Sara Megginson, from Your Investment Property Magazine. G’day Sara how are you doing? Congratulations on another great issue.
Sarah: Thank you so much. Yes, we’re doing very well, very excited about this issue.
Kevin: Well mine’s arrived and a very colourful cover it is too, featuring or promising the Annual Top 100. Huge amount of research gone into this one.
Sarah: Yes, this is our Annual Top 100, so we do this every year at the beginning of the year to kick things off, and I guess basically give investors a bit of an idea of where the experts are predicting we’re going to have the biggest growth in the year ahead.
Kevin: Any surprises in there for you?
Sarah: There are always surprises. Always surprises. It’s an interesting mix. We’ve gone out to about four or five different really well respected and well-known researchers and analysts. They’ve all come forward with their short lists. Then we take all of that information and we do our own research on them and we look for things like the supply and demand ratio, the capital growth in the past. The population growth, what local infrastructure is like. All of those different factors that can impact a suburb’s value.
Sarah: Then we’ve trimmed out some of the really ludicrously expensive suburbs that might comprise an investor’s entire portfolio. Because if you’re spending over $2 million for one property, you don’t have a lot of wiggle room there. We try to keep them relatively affordable and come together with this list and it has a real range of suburbs. There’s actually suburbs in every state, in almost every state. I think Northern Territory doesn’t make the cut, but everywhere else had some. Even the interesting thing to me was that Perth popped in with a few different suburbs there. Even though the recent growth statistics there have not been very strong, I think that’s a market that we’re going to see some growth in, in the future.
Kevin: The thing that struck me when I read through the list and you’ve highlighted Perth there. But it sort of highlights the fact that no matter what the market’s like anywhere, there are always opportunities aren’t there?
Sarah: Exactly. I think that is a key lesson out of any of these stories that we do is that there’s no such thing as a Sydney property market or the Perth property market. Within each of those cities there are smaller micro-markets operating. Even down to within a suburb, within a street, you can have one street and on one side of the street it performs better than the other side because one side might have a better view or might back onto a beautiful park that can never be built out. The other street might have some housing commission in it that lowers the value or it might have a drain pipe running behind it that brings the value down. There are so many little things that can influence a property market. That’s why we always say with this particular list, it’s a really good starting point, but it’s something you should use as a road map of where to get started. But then you need to go and do your own research and your own due diligence to make sure that these are the suburbs that match up to what you want to achieve with your property investing.
Kevin: And as well there’s also the great investor story, a Six Figure Profit Strategy.
Sarah: Yes, and he’s moments away from it being a Seven Figure Property Strategy.
Sarah: He’s got over 900,000 or just around 900,000 equity in his portfolio. What I love about this one is that it’s a husband and wife team. They’ve just been slowly and steadily building their portfolio, trying a few different things. It shows the decisions they’ve made over the last decade and how they’ve had growth. The risk mitigation strategies they’ve used, which is always really important. They’re not trying to do anything crazy. They’re just trying to slowly and steadily build their wealth and that’s what I really like about a story like this that shows other investors what you can achieve if you just put a really clear strategy in front of you and take action towards that.
Kevin: Yes and the story also talks about a renovation that boosted the rent by 25%.
Sarah: Yes, we all love a good renovation story. This one, you can renovate for a range of different reasons and this one in particular they renovated to hold. They knew they wanted to keep the property afterwards. This renovation was designed to boost the rent and make it as attractive as possible and it really worked. I think the previous rent was around $370 and then after the renovation it was renting for $500 a week, so it boosted the rent by thousands and thousands of dollars a year.
Kevin: Yeah, good.
Sarah: A good return, and as well as that added six figures to the value of the property, so really great result.
Kevin: Yeah, in every magazine there’s always a lot of take home value and in this one, there’s some really good advice about tenant damage and, well, how to avoid it and what can happen.
Sarah: Yeah. Exactly. I think it’s important to cover some of the risks of property investing and the downsides. In this particular story we interviewed someone who’d had a really frustrating experience with a tenant who’d caused a lot of damage to her property and then done a runner. The end result was over $14,000 worth of damage. It goes through the process of what happened next and how she dealt with it. How she was able to avoid having to pay all that herself. Stories like this are designed to show people that there’s always things that can go wrong, but if you plan for them in advance it doesn’t need to be the most stressful or the most expensive experience of your life.
Kevin: It’s out now, issue number 138, Your Investment Property Magazine. Congratulations on another great issue, this one takes us through Christmas and New Year. I look forward to talking to you next year about issue number 139.
Sarah: Yes, I know we’re marching on ahead into 2019 at break-neck speed, it’s scary.
Kevin: We are indeed. Sara Megginson, thank you for your time.
Sarah: Thank you.