Property Investment Philosophies

Transcription

1 Property Investment Philosophies

2 Introduction JHP Advisory Group / Established in 1980 / JHG clients have invested in excess of $4.5 billion in direct property / Recommends property investment in Melbourne, Sydney & Brisbane / Managed over 4,000 tenancies and 500 body corporates / Consulted to thousands of individuals about Property and Property Investment John Hopkins / Founding Chairperson of the Property Investment Association of Australia / An integral part of establishing the first Diploma of Property Investment with Deakin Prime (Commercial arm of Deakin University) / Working collaboratively with Deakin University in regard to various research projects and their property / 34 years of working with valued intermediary partners

3 STOP THE PRESS!! Lantern strongly believes in. BUILDING WEALTH THROUGH A SOUND PROPERTY INVESTMENT STRATEGY

4 3 Golden Rules of Property Investment 1/ Do your financial planning conservatively and correctly 2/ Buy the right property What is the right property? 3/ Give it time

5 What do investors WANT from their investment? Returns Capital Growth Income Growth Confidence of Income An Appropriate Initial Yield

6 What do investors NEED from their investment? Returns Security Flexibility

7 The Myth Location, Location, Location

8 The Reality Continuing Strong Demand The question of the property is Will it provide Continuing Strong Demand for both Tenancy and Sale for now and the foreseeable future? Subject to: Criteria base Specific category of property

9 What categories of property should individuals NOT invest in? COMMERCIAL SPECIAL USE RESIDENTIAL RESORT RURAL REGIONAL CAPITAL CITIES

10 Lantern Property Partners Recommended Property Selection Criteria Criteria 1 Choose the best inner urban areas of a major metropolis from a demand, popularity and opportunity point of view. Criteria 2 Choose properties in those areas that most people wishing to own or occupy can afford. Criteria 3 Choose those properties that are most appropriate for long term investment, namely from a physical maintenance and a tenancy management point of view. Criteria 4 Choose those properties that are most appropriate to a particular investor s circumstances. Very often these are tax, financial or portfolio balance considerations.

11 Lantern Property Partners Recommended Property Selection Criteria Criteria 1 Choose the best inner urban areas of a major metropolis from a demand, popularity and opportunity point of view.

12 Major Metropolises Our definition of a major metropolis in regard to property markets is where if there is a change in one, two or three issues that cause a change in underlying supply and demand circumstances to such a degree there is an increase or decrease in either or both capital values or rental levels, then we consider that population base not to be a major metropolis Indicators - Strong & independent economy - Population size

13 Major Metropolises Graph The population of Australia s Capital Cities

14 Inner Urban Wave Theory Property increases in value at the greatest rate closest to the centre of a major metropolis, and the rate of increase decreases in a wavelike motion as you move away from the centre of that metropolis. International Experience London, New York, Paris Tokyo Exceptions LA & Johannesburg

15 Inner Urban The Wave Theory - Availability of Land Area of land 0km 3km 5km 10km 15km 20km 25km 30km Distance from Centre of Major Metropolis

16 Inner Urban General Inner Urban Amenity The Wave Theory Development of a Population Base Transport Systems Retail Activity Government and Public Administration Commercial Activity Entertainment Education Residential Accommodation Quality Residential Locations

17 Inner Urban Other considerations regarding selection of inner urban locations Socio economic Geography Demographics History

18 Inner Urban Equation Price Amenity Size

19 Lantern Property Partners Selection Criteria Criteria 2 Choose properties in those areas that most people wishing to own or occupy can afford. Price Ranges: Melbourne $350,000 to $850,000 Sydney $450,000 to $1,200,000 Brisbane $400,000 to $700,000

20 Lantern Property Partners Selection Criteria Criteria 3 Choose those properties that are most appropriate for long term investment, namely from a physical maintenance and a tenancy management point of view. Small houses Townhouses Apartments: studio, 1, 2 & 3 bedroom New or Established

21 Lantern Property Partners Selection Criteria Criteria 4 Choose those properties that are most appropriate to a particular investor s circumstances. Very often these are tax, financial or portfolio balance considerations. Established Stamp duty savings Off the plan

22 Lantern Property Partners Unique Property Investment Selection Lantern Property Partners Recommended Property Premium property - carefully chosen in line with our rigorous prime property investment criteria. Lantern Property Partners Endorsed Property A client wishes to purchase a property that does not fit into the stringent criteria for Lantern Property Partners Recommended Property.

23 Who is in a position to invest in property? 1. Capital or assets that can be used as security to provide capital to investment 2. Surplus cash flow 3. Time

24 Question Time