How To Find High Growth Suburbs – Feat. Jane Slack-Smith

https://www.youtube.com/watch?v=Ibnpdo6HCh4 How do you find suburbs that are both low risk that are also likely set for good future capital growth? Free Webinar: How To Find And Profit From High-Growth Areas In this episode we look at: - The 'Portfolio Killer' mistakes that people make when buying property- How to Dot Map Technique can uncover the ripple effect- How to lower your risk by avoiding red flags- What are the indicators of suburbs that have gone up in value- How two suburbs with a similar price can be SOOOO different in terms of growth potential and risk factors We also go through the data and do some analysis on a couple of suburbs in Melbourne so you can see side-by-side how we compare one suburb to another. Free Webinar If you liked today's episode then Jane is hosting a free webinar where she goes into this topic of finding high growth suburbs in more detail. I have attended many of Jane's webinars in the past and they are always jam packed with useful information and this one won't be any different. You owe it to yourself to get on there and learn how to find these high quality suburbs to invest in. Click here to sign up for the webinar Transcription: You Ready? I'm always ready when it comes to investing in property. One of the most important things that you need to do is choose the right suburb. So today I have with me property expert and suburbs, select expert Jane Slack Smith's. Hey Jane. How's it going today? Good, Ryan. Thank you. Yeah. So Jane has been a friend of the channel for quite some time, hasn't been on for over a year. We have talked a lot about self selection in the past, Jane, in relation to renovation because I know that you have done a lot of renovations and talk to people about that. So I've done that. But in this episode I wanted to talk more broadly about suburbs selection, how to avoid those bad suburbs as well as how to find those good suburbs for your everyday investors. Absolutely. And you know, one of the things, um, I, as you said, I love renovation and renovation is one of the three prongs of my trading strategy. So having been an explosives engineer and you know, really risk adverse, I wanted to kind of risk assess all the risks in property and and kind of, you know, shortcut the way to make money without making mistakes. So I came up with three ways of making money, money and one was to buy below the market. So you had had intimate knowledge of the market in the suburbs and then add value and I was using renovation is that technique and some people use your granny flats or development and then buying a high growth area because all they can make some short term gains with buying below the market and renovating, you know, if you can get in a growth area, that's where the money is. So you know, getting the right suburb and the right property and the right street is so critical to whatever your next part of your strategies. Yeah. And for those of you who don't know, I've actually been doing Jane's one of Jane's courses on suburbs selection and she talks a lot about the stuff that I already do, but then she adds on top of that as well. So she has a great deal of knowledge around this stuff as well as knows where to pull the data from and stuff like that. And I really love the approach that you take. It's really in line with like the research that I've done in the past as well. So let's talk a bit about first the mistakes that people make when they choose a suburb. You've got a webinar coming up and you're going to be talking about these portfolio killers, I think you called them, which I love, but people often make so many mistakes when they invest into an area. The biggest mistake that I see is that they just don't even do any research to start with, but what are some of the things that people should avoid when they're looking at suburbs? Actually just on that point, Ryan, I spoke to one of the ceos of one of the biggest property management companies in Australia just last week and I was saying to him, have you done big data analysis on where people are buying the landlords of buying their properties? And they said on average then within 15 kilometers from where they live, so we are parochial animals and we think we know what we know. But when it comes down to really knowing a suburb and you have someone challenges you on, you know, what's the growth rate for the last three, five, 10 years, you know, what's the yield, what's the average vacancy rate, what's the percentage of rent? It's one of the best streets of buying. People kind of go, oh no, I don't know that, but I really know the suburb. And as you said, you know, there's this portfolio killers and every single day, you know, we come across people that have, they're just disappointed that properties haven't performed. And usually it's one or two or even a mixture of some of the key portfolio killers. And I think the first one is, you know, they just aren't looking at the pricing pressure. So if we think about being in a cbd area and we know that people want to be close to where they wanted they work, that's why we had those inner ring suburbs that are actually in a higher end price. And they have more growth, but as people can't afford these suburbs, they go out to the next ones, the next ones, and you know, I know in 2006 I was looking to buy in Sydney way before the house prices where they are today. Um, I was looking at least in suburbs and there was a Randwick, could she and Kensington or had a million dollar price points, whereas Kingsford the next suburb out with $625,000. So I bought a $625,000 property in 2006 and we're talking, you know, 12 years later it's worth two point 2 million. That's the ripple effect because people then could move down and bought in that suburb and the growth went up. So that's just an indication of, you know, they haven't, they've looked at a, um, an area. And I thought, well, I like this area, it's kind of works. It's close to home and they haven't actually found some of the key indicators. So they haven't got the pricing pressure to start with. That gets that real bumpy growth. Yeah. And that pricing pressure is so true. So many people, they want to live in a particular area, but then they can't afford it. So then they do. What do they do? What's the next step? Well, let's look at the surrounding suburbs closest to it and look where we can afford renters, do it home homebuyers to it. Everybody does it. And so you're saying that people should be looking for this rather than just like buying where they are because they might not be in an area that has pricing pressure. Absolutely. Look, I remember doing a. I'm a top from money magazine at one of the home shows and the. I did analysis on three suburbs beside each other that each had the same medium price, but due to infrastructure and some other things we'll get into a bit later. They each had predicted growth. That meant that one sub in 10 years time will be $300,000 more then the suburbs side them, which means you know, even if you use these tactics by your own home, that's $300,000 more wealthier. You are by just doing a little bit of analysis in the suburbs and even the suburbs beside each other. Yeah. And so it's not just the medium price that you need to look at when you're investing in a capital city. It really is like the surrounding suburbs and the pricing pressure and the growth that surrounding suburbs have had over the course of a number of years. Yeah, absolutely. And you know, one of the techniques that I teach is the doc map, which I've stole quite heavily from Medina Simmons, who's a fabulous property expert in, in her own right. I was watching the video on the map and you said this was invented in like the fifties or something. Oh, well she's, she hasn't made, she's not that old, but she's been doing it for a long time and it, you know, it's uh, it's amazing. Some of my students bring up these met company and they say, you know, we need a quarter inch transparent, um, dots and, and these, these guys ended up ringing me up and I go, what are you doing? You're sending all these people to us, to this net company and we've never had this many people buy dots before me, so we've got this map technique. We take the 10 year past growth and we added a legend and we actually tried to find that ripple effect and he said the only people who used to buy these dots was Audi when they first came to Australia and they bought green and red dots and they actually put down, we're in every city in Australia where all the woolworths and coles work so they could work out where they are going to buy by locations. So I think it's been done by other people too. And so now you're propping up this map company by teaching us all about how to invest in property and find the best of it. Obviously could do it cheaper with highlighters, but you know, we find dot. Yeah. Well and then you can get the kids involved as well and then they can. I know we pay like twenty cents per dot. Okay. So what are some other portfolio killers that people should be aware of? I mean, what we've obviously saying, some of the tragedies that have happened to people's portfolios by buying in single mining towns and you know, just the, the, uh, the devastation to complete portfolios based on some of the people who've bought in port hedland and Marimba and you know, having been a mining engineer and having been to probably every mining town within Australia overnight, a new period, you know, there's highs and lows and the market follows the infrastructure spend and the commodity market and it's just so variable. But you know, there's also, I'm single industries in a lot of regional towns to like avatars or you know, even in bigger areas like car manufacturers. So sometimes when there's that, that one industry that the entire economy is based on, you know, a slight change can make a significant difference.