Harnessing the local knowledge of regional experts will ensure investors find the best property in the right location, says Michael Olivieri.
Michael is the owner of Central Coast Buyers Agent and personally boasts a property portfolio worth over $3.5 million.
He told KnowHow’s Bushy Martin on Property Hub’s Get Invested podcast about the importance of using intimate local knowledge, as well as your own research and data analysis, to secure the best available investment property with the highest potential growth.
Doing the right amount of research
Michael said not doing enough research, and equally doing too much research, can lead to investors making costly mistakes.
“Obviously by not doing enough research, you’re going to fall short. You select the wrong property or the wrong area and it’s not going to perform the way you intended to. And you are all going to have a bad experience and you’re going to end up cursing property,” he said.
“And if you do too much research, you suffer from analysis paralysis, and that’s not a good thing either. So you might know a lot, but unless you actually jump in and get your hands dirty, then you’re also not going to get the results you want.
“So I think it’s just doing that right amount of research, that you feel confident you’re seeking the advice from the right people in your team, building a team around you to give you the advice you need it, and then actually acting on the advice they’re giving you.”
Choosing the right location
There are several key growth drivers and location attributes investors need to consider.
“There are many free resources you can access and paid resources as well in terms of data and understanding what growth drivers are, such as where infrastructure and amenities are going or where they exist, and looking at all the different metrics. So it’s really about understanding the area and knowing what people want in that area as well,” Michael said.
“So, for example, it’s easy for me to talk about the (Australian) Central Coast because that’s the place I know. So it is very much the culture here and the idea that there’s not a great deal of units and strata title properties here. There are a few pockets where there’s a higher concentration, but majority of people do like to have a backyard and have space and things like that. So it’s understanding what the occupants want. If you’re buying a property for an investment, then you need to understand what the tenants want.
“Then it’s also looking at what suburbs, where the money’s being spent, and what infrastructure is being put into the areas to improve that, whether it be transport and accessibility, improved medical facilities, or increased schools.”
For Michael, supply is one of the biggest growth drivers to analysis.
“For example, the Central Coast is quite landlocked, similar to Sydney. There’s plenty of land on the Central Coast, but not all of it is accessible for development or new housing or new commercial even because a lot of it is either green corridors or flood areas or bushfire zone. So it’s that supply versus demand. When you’ve got a very limited supply and you’ve got strong demand, that’s one of the key things that are going to drive growth both in the purchasing market and the rental market as well,” he said.
Finding intimate local area expertise
Michael compared the benefits of working with local buyer’s agent compared with a national approach.
“You really need to understand the area. Data is great, and you need to review the data as well and understand what the growth drivers are, but having that intimate knowledge and actually having boots on the ground unlocks a lot of opportunities as well and gets you access to property that you wouldn’t otherwise get access to if you’re with a national buyer’s agent,” he said.
“National buyer’s agents just don’t have enough time in the day to build relationships with people all over the country for them to then be calling you and sending deals your way. For me, I know the Central Coast – I’ve grown up and lived pretty much my whole life – and I’ve really focussed heavily on building relationships with people on the coast in all parts of the property purchasing and owning journey.
“So I try to educate people. Obviously the Central Coast is in an area that suits everyone for investment. So I believe it is a great place to invest, but it’s not something that suits everybody and everybody’s budget and everybody’s strategy. So it needs to be the right person to purchase a property on the Central Coast as an investment. And so I really believe in the education piece. If they want to learn, I’ll teach them and give them as much of my knowledge as I can, because if they then want to buy a property elsewhere, I don’t purchase properties elsewhere. So they can either engage in a buyer’s agent elsewhere or they can have a go at doing it themselves.”
Finding the right property expert
Michael provided a list of questions to ask when selecting a buyer’s agent.
“Ask about their track record, what they’ve done, what their education background is, and understand why they became a buyer’s agent. For me, there are a few, like in any industry, when there’s money to be made and people can become quite transactional and just chase the dollar. But for me, it’s more than that. I do it because I enjoy it and I enjoy seeing other people get successful in property,” he said.
“So those are some of the questions I would ask, as well as understanding where their focus is in terms of their area, the type of clients they work with, and the type of properties they purchase regularly.”