Property Investment Accelerator
Week 2 - Transcript - Please use the "search feature" to search keywords/ topics
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0 Minutes to 15 Minutes
Hello and welcome to week two of the property investment accelerator. By now you
should have gone through week one’s material and even if your strategy for your very
next purchase isn't completely finalized, you should be quite close to thinking about the
price point range that you can afford, having talk to your having talk to the mortgage
broker, you should be quite close to understanding what yield that you need, what your
risk appetite is, and also how active or passive you want to be in your wealth creation
journey. You should have started to understand what's possible for you in terms of a
long term portfolio strategy and when you can start to expect a decent passive income
over the long term using the wealth creation strategy tool. So, if you've done all that
then you're ready to start week two, and week two is all about selecting your best high
growth high cash flow suburb. This is probably the most in depth training anywhere in
Australia on how to actually find a suburb that will grow in value, not only in the long
term but also in the short term, and at the same time provide you with positive cash
flow. So, it doesn't impact your lifestyle and it doesn't hurt your borrowing capacity so
much so that you can actually continue to borrow money and add further properties to
your portfolio. Now property investing really should be called suburb investing because
in the buy and hold strategy, suburb is what does the heavy lifting in terms of your
wealth. We'll go over this and so much more in this week so let's go right now. So now
I’m on the property investment accelerator week two download, you can find this
document, this system, this methodology in the download section and once again it is all
about how to select your best growth suburb. So, what we’ll do is I’ll take you through
the theory and then I’ll take you through a practical application of it with all the data
sources and I’ll actually demonstrate it for you. So once your investment strategy is
developed, there are five layers of consideration that we need to evaluate. Before
actually making a purchase decision, before actually being able to say that we want to
buy this house on this street in this suburb etc. Okay. So those five layers of
consideration and number one Australian-wide factors so factors that influence or
determined the growth of the entire nation in terms of property markets. Then layer
number two is factors that impact or determine the growth of an individual city or town
this could be Brisbane, Melbourne, Adelaide, Sydney or it could be Bendigo, Ballarat,
and Geelong, Newcastle or it could be the even more regional cities like Shepperton,
Orange Dubbo, et cetera. Okay so what I’m going to teach you is not just exclusive to
capital cities, although your specific risk appetite like we talked about last week may
suggest that you in terms of your own strategy you only want to stick with capital cities.
But for being holistic in the training, I’ll be teaching you how to look everywhere. And the
layer two, you know factors of consideration they’re more important when you do think
of a of more regional city. I won't say more about it at this stage will come back to it but
layer two is more important when considering regional than when it is considering
capital city. Layer three is suburb factors so these are the factors that impact or
influence or determine the growth of a specific suburb within the city-or town. Then
there's layer four, these are the factors that impact that will determine the growth of
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 1
Property Investment Accelerator
particular pockets within a suburb or which of the good pockets to invest in and which
are the not so good pockets to invest in. And then finally property factors so these are
the factors that determine or influence the growth or the strength of a specific property
that's already within a good pocket of a suburb. So, for us to be holistic and
sophisticated property investors we need to analyze all five layers of consideration. Not
just one or two. So, this week, week number two will journey through all these factors
within layers one two and three, and in next week's content will journey through the
factors and layers four and five, and really even though we’ll be going through layers
one two and three in this week's training, it's really layer two and three and really layer
three that is where you make or lose money and property in a buy and hold strategy.
Right so the suburb factors predominantly contribute about seventy to eighty percent of
the relative future capital growth performance of your individual property so you can get
the suburb right and the property wrong, and you'll still make money of course we don't
want to do that we want to get everything right the but just so you can get your head
space and understanding correct it's the suburb that does the heavy lifting okay. And
like I already said layer two location factors have a greater waiting if you're looking at
smaller regional towns in comparison to capital cities because capital cities are so
diverse generally speaking, of course summer less diverse like Darwin or Perth but
generally speaking there so diverse, that even if one part of the economy is soft another
part will hold its own. But in regional we need to be more careful and I’ll come back to
that. So, the general tide of the Australian property market which is layer one that
influences the absolute performance of the entire market or entire national market okay.
So, what that means is that, that's only a generic statement. Even if the entire Australian
market goes backwards, they will still be some cities and some suburbs that go forward
and vice versa as well that's why there is no one property market, in fact there are
fifteen thousand property markets because there are fifteen thousand suburbs across
Australia. And that's why we need to look at all of these layers not just number one. So,
when people say oh how's the market going you know that's actually not the right
question because there is no one market. Every market has his own cycle you know is
doing a different thing with different drivers at any one moment in time. So that's why we
need to analyze all these layers of consideration not just number one. Okay. Now the
factors across each of the five layers, what they do as they ultimately help us determine
whether demand is greater than supply in a suburb okay so, this is just a bit of theory.
Capital growth or price growth is determined by supply and demand supply and demand
is the backbone of economics. Right, together supply and demand basically provides
the that crucial concept that influences the price of goods and services. So let me just
break it down let's talk about, let's talk about toilet tissues at the time of recording it's a
fairly point topic. If more people want to buy toilet tissues, then there are toilet tissues
available in other words there is more demand than supply then prices will go up.
Whereas if there are more toilet tissues available then there are people wanting to buy
toilet tissues then price will go down. However, and most in some instances the quantity
of toilet tissues available is optimized, based on how much demand there is. And if that
is optimized well then, that market for toilet tissues is basically what we say in
equilibrium, which means that prices won't increase nor will prices decrease. Okay so
over the long term generally in any market not just the property market but any market
for goods and services, over the long term, the market -goes towards equilibrium, okay
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 2
Property Investment Accelerator
goes towards equilibrium. In property investing, what we want to do is we want to buy in
a suburb where l’ll use the cursor here, we want to buy here where demand is already
higher than supply. So, you can see that this is the demand line, you know in terms of
demand generally the lower the price, the higher the quantity demanded. So, this is
price or median value in the context of property and this is quantity. So, as you reduced
price you know your demand increases that's why it's slope that way. Whereas
producers of something generally speaking the higher the price the more they want to
produce because they are getting more money for it. So that's why the supply line is
curved like that. Now what we want to do is buy into a suburb we want to buy into a
market where, supply and demand don't equal each other. Because as equilibrium that
means that prices aren't really increasing nor are they decreasing the just flat. We want
to be buying in a suburb, where demand is higher than supply right so you can see that
sort of faint line in the background there, that means that demand has shifted from here
to here see that. And so therefore this equilibrium is no longer an equilibrium we're up
here. Demand is higher than supply, and the art and science of making money in
property is to understand, is a suburb right now experiencing more demand and supply?
If it is than prices would have already been growing or there will be a lot of pressure for
prices to grow. The analogy that I like to use to really make it simple is one of a
pressure cooker. So, pressure cooker you put it on the stove you put some water in it
you might put some vegetables and it'll something like that, and you shut the lid and turn
the cooker on. After a while the water inside it starts to produce steam and that steam
increases the pressure within the pressure cooker. Once that steam is growing and
growing and growing and growing it reached with it reaches a threshold at which the
little whistle on top of the lid of the pressure cooker starts to whistle it just starts to
vibrate slightly starts to make is a slight whistling sound, and if you don't actually open
the lid or if you don't let that gas out than that whistling sound gets bigger and bigger
and louder and louder and you know it starts vibrating stronger and stronger. So, the
idea is that we want to be out of find a suburb where the whistling isn't too loud,
because that means a suburb is already boomed, but that whistling is just about to start
right and so that's really the art and science. We want to be out of find a suburb where
demand that gas is more than supply and it's its’s just continuing to increase were its
just going more and more and more the gas is building up and up and up. Now in the
pressure cooker example you may have lot of gas build up inside, but the whistle may
actually not be going off just yet because it's not quite at that threshold. That's a bit like
demand being more than supply but prices not actually moving just yet. Right, we just
need that pressure to build up a little bit more and then prices will start to increase. So
that's really what we're looking for as a concept we're looking for a suburb where
demand is already higher than supply the prices may not already be increasing but we
know that if they are not, they will be in the near future or they might already be
increasing, I’m slightly the whistle might already be going off. Okay so we want to
identify periods of imbalance, where there is already more demand and supply and the
imbalance is likely to increase in the future where were buying here and we want that
imbalances to continue so that prices continue to increase and that's what will ensure
price growth in the short and the long term.
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 3
Property Investment Accelerator
15 Minutes to 30 Minutes
Okay and we want to analyze this across the five layers of consideration not just one
but all five and that's how we holistically with low risk safely and securely identify
suburbs that will increase in value in the short term and the long term. Now these five
layers of consideration they are not independent of one another. So those same five
layers illustrated in a different way on these diagrams of one two three four five they're
not independent so what that means is that a macro economic change can impact our
suburbs growth ultimately or properties growth through a domino effect. So, what I’m
suggesting here is that even if we find the perfect suburb not in terms of a really rich
suburb just that actually doesn't matter at all. Price suburb price doesn't impact growth
you can find a two hundred fifty thousand dollar suburb that will grow, you can also find
a seven hundred thousand dollar suburb that will grow that's not what we're looking for
what we're looking for is and the underlying demand and supply balance between and
within a suburb. You might get the suburb supply and demand right but if something
happens to the city or town, then that will have an impact on the suburb or if something
happens to do the Australian white factors like a global pandemic then that will have an
impact on the suburb subsequently that will him have an impact on the intra suburb
factors so you know where you're buying within the suburb ultimately on the property
that you're buying. So, I’m illustrating this to be able to give you a really holistic and
mature understanding of the property market. It's not that we are doing a really a good
analysis, a really sophisticated analysis and were buying a really good suburb and then
we can just lay back and let time do its thing. No, you know if the something happens to
Australia, that's a fundamental shock, then that will obviously impact our suburb as well.
But here's the thing if you're actually applying what I’m teaching you and if you're
actually understanding and implementing it, you're executing it then regardless of what
happens to the Australian wide factors and regardless of what happens to the city and
town factors, your suburb will outperform the average anyway. So that's really what I’m
promising you. If you have done your homework correctly and followed the system then
as a really exaggerated example if the entire Australian market falls by fifty percent not
saying it will, by any stretch of the imagination, but to give a really extreme example if
the entire, Australian market falls by fifty percent than your suburb will fall by less than
fifty percent. On the flipside if the entire Australian market grows by fifty percent let's say
in a set period of time, your suburb will grow by more than fifty percent. So, by doing
this training what I can't guarantee is that the suburb that you select will grow by ten
percent every year. I can't guarantee that because there are a city and town factors in
their Australian wide factors that may happen in the future that we can't control. Right
but what I am saying is by doing this training and if you follow the system and
methodology process correctly regardless of what happens you will beat the average by
a long way and by beating the average, you're able to get sufficiently large capital
growth to achieve the passive income that we talked about in the week one's wealth
creation strategy quantum. Okay, so the most important thing is if you follow the system,
you follow the process, you will beat the average property investor and in fact you know
you'll beat them by long way and that's what's really really powerful capital growth is the
engine cash flow is the oil. We need that engine to be humming for us to reach a
passive income target. Now, I talked about the in this week's training, week number two
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 4
Property Investment Accelerator
that we will be going through the first three of the five layers of consideration. So those
three layers are here- the Australia wide layer number one, the city or town layer
number two and the suburb layer number three. In week number three will be going
through layers for and five. But for now, it's these three are our three layers of
consideration. And across the three layers of consideration the fact is that allow us to
determine growth are dispersed across two time horizons. The first time horizon is zero
to five years, so what we say short term and the second time horizon is six to fifteen
years, or what we dub as medium or let's say long term. Beyond fifteen years, you know
if we're thinking about twenty to thirty years basically any place that you buy will do well
over the very very long term, but of course if you want to compound and a crew a
portfolio of multiple properties you want capital growth you want growth in the short and
long term especially in the short term. Okay so three layers two time horizonseverything is important. Right the factors across each of these six boxes, the six
intersects are important, but this a relativity in their importance. So, in the long term
that's obviously very important the Australia wide factors like how politically stable
Australia is. You know Australia is not going to become a communist nation it's there's
not going to be a military coup, it's not be going to become a dictatorship et cetera, and
that's a really an important thing for a long term solidarity and stability of the Australia
property market in general. Okay, that’s important but how important is that relatively
versus other things probably less so right so whilst that's important more important than
that are the city and town factors so these are more important but the most important or
the Australia wide short term factors and, the suburb short and long term factors. Right
and the reason is that even if the city and town was to perform poorly, you can still have
a suburb that excels okay. You can still have a suburb that outperforms. In Brisbane, if
Brisbane doesn't do well, you will still have suburbs with in Brisbane that do really really
really well and other suburbs that do poorly, right so the city in town is important were
not ignoring it but really the suburb factors are the most important as well as the short
term Australia wide factors these help us understand the macro influences on our
property and helps us with timing and I’ll get into that and more and more detail. But
really these Australia wide factors are outside of the investors control their outside of
our control we can't really influence them and we can't really make a decision of where
to buy based on them. If the interest rates changed for example that change is
impacting every single suburb equally right. So those sorts of things are really outside of
our control and don't help us decide where to buy but rather help us decide when to
buy. But I’ll explain all of this and more and more detail as we go through. Okay, so the
specific factors that are scattered across the six boxes that I introduced you to just
before a both quantitative which means that they are dotted and also qualitative which
means that there's no numbers but we need to be able to interpret these things, and all
of these things should be interpreted together we need to think about all of these factors
together and holistically to assess what the capital growth prospects are for a particular
suburb. Okay so we can't just look at one or two factors often times property investors
look at historical price growth they might look at unemployment they might look at
population growth et cetera, the vacancy rate maybe and they make a decision of yes, I
want to buy in the suburbs no I don't want to buy in the suburb. But really, four or five
factors really don't cut it when it comes to really understanding the suburb the property
market and making a decision of where you're going to invest in a hundred of thousands
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 5
Property Investment Accelerator
of dollars. So it's a very very large decision probably one of the largest decisions
financially that you'll ever make so we want to do it very robustly, and you can see that
the boxes that were dark blue, those that were most important have the most number of
factors so because they were the most important areas we place the most number of
factors there so that we can really bottom it out we can really understand it analyze it
from different angles and really be confident that where we are investing in what we're
investing in is going to be a very strong performer and a good decision. Okay, so there
are more than thirty five factors in in total but I don't I don't want you to become
intimidated by seeing this number of factors there's a process that will go through
there’s filtering mechanism a step by step approach to doing this analysis so don't
become bewildered or don't find it daunting, I’ll hold your hand through this. So, these
factors that I talked about, all that you saw on the previous page their best assessed in
a particular sequence in order to streamline and systemize the process of location
selection right so we can't do everything at once we can't dump these thirty to forty
factors on each of the fifteen thousand suburbs across Australia, you know and see you
which is best that's not practical within six months what to speak of one month a one
week or a few hours it's not practical. So, we go through a very strategic and logical
sequence to actually filter our suburb and choose our location. So, the first step that we
take his to assess, the factors within the suburb layer in the short term. So, what we're
doing first is assessing each suburb based on a short term performance outlook, and
then once we filtered suburbs through that lens, we only take those that have been
shortlisted to the next step, which is the suburb layer in the long term and then we only
take a few of those to the subsequent steps et cetera. Now often times investors start
up here and they say oh look how is the Australian market going to perform I don't think
the Australian markets going to do too well therefore I won't invest in property. But
regardless of how Australia performs there are going to be cities that over perform and
under perform. Right in every boom there are cities that don't boom and every bust
there are cities that still boom. So that's not that's the reason why we don't start up here
and same with city or town you know some people say oh look Sydney's had its day I
don't think it's going to perform to well any more, therefore let's not invest in Sydney let's
go somewhere else But the same logic is explained before regardless of whether
Sydney booms, they will still be suburbs that don't boom and regardless of whether
Sydney busts there will still be not withstanding everything else suburbs that boom. So,
yes, the city and town have an impact on suburb selection but we can't discount every
single suburb with in a city just because of some high level commentary that people are
giving on that on that city. So that's why we start very granular we start at by analyzing
each and every suburb individually through the short term lens, and so why do we
should start its short term and not long term? The reason is that for our strategy to work
for our strategy to work and be able to produce, you know a hundred thousand to two
hundred thousand dollars a passive income in five to ten to fifteen to twenty years' time,
we need multiple properties we don't need ten necessarily we don't need fifteen
necessarily but we need multiple properties and like I explained in week one we want to
have the ability for each property to grow and value and in a year's time or two years’
time or three years’ time to be able to take that equity out take that capital growth out
without selling the property just refinance the property take that equity out using a
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 6
Property Investment Accelerator
mortgage broker and use that as a deposit I’m fully or partially for the next property
purchase. And so, if that's our strategy we are concerned with short term growth.
30 Minutes to 45 Minutes
and as far as I know there is no one in Australia that is teaching quite a robust enough
way to access short term growth as what you'll see in this training. So that's why that's
not only the most important, but that's why we start here first and then once we've
filtered suburbs based on their short term outlook then and only then do we continue to
the long term and then back up here etc. Okay, so the last theory slide before we
actually start getting in to the into the fun stuff. So, what I’m explaining here is that yes,
I’ll be teaching you a scientific data lead filtering system that you can apply to accelerate
location selection and when I say accelerate unique and do it and in a matter of you
know hours if not minutes. So, whilst it is data lead and it is scientific it also must be
facilitated with a deep understanding of all the factors involved. In other words, you can’t
memorize this you actually need to understand it without understanding it you won't be
successful. So, let's go through this slide from the left first and then to the right. So on
the left hand side I’m saying that while his the filtering mechanism he is actually how we
apply the location factors through filtering system. So the first bullet point, what I’m
saying here is that within layer three which was the suburb layer your specific strategies
should already shortlist suburbs to within a specific price point range remember that's
what we talked about in week one and you come up with that based on your borrowing
power that you've developed in working with the mortgage broker, also any savings that
you have those two things combined to tell you what price point range you can expect to
afford and of course you use the portfolio of budgeting tool to understand how much
capital is required so you can get to the exact number or good range. The second part
of your strategy was gross yield if you remember that was on the cash flow side whether
you want positive cash flow by law or only a little bit or whether neutrals fine or if you're
a high income earner may be negative geared is fine but I generally don't recommend
that because it has an impact on your borrowing capacity as we discuss in week one.
And finally, your vacancy rate so vacancy is also part of your cash flows, and your
vacancy rate you know will dictate obviously some suburbs that don't make the grade
and other suburbs that do make the grade. If you're vacancy rate is higher than clearly
more suburbs will make the grade, but you may not want to invest in those suburbs
even though they make the grade because you don't want a four week vacancy every
year. Right so I’ll talk about vacancy a little bit more detail, you know what's to come this
week that generally speaking like we discuss last week price point range gross yield
vacancy rate are the three very very important elements of your strategy the other
elements was your risk appetite whether you're happy to go regional and capital city or
just capital city and we talked about that in detail last week in week number one, and
the last element of your strategy was how active or passive you want to be. Whether
you we want to be able to renovate develop put a granny flat on or whether you want to
be completely passive. But for the filtering mechanism in terms of numbers what we use
of these three elements of your strategy, and those already should shortlist some
suburbs because clearly your strategy is not going to leave the entire fifteen thousand
and suburbs across Australia still open to you was going to start filtering already. So,
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Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 7
Property Investment Accelerator
the next filter is to assess the growth prospects of the remaining suburbs through the
first ten of layer three one two five year growth factors. Okay so once we've shortlisted
our suburbs of the fifteen thousand suburbs, through the lens of our strategy the next
thing we do is we assess the growth prospects of the remaining suburbs whatever is left
through the first ten of layer three’s one to five year growth factors. So, these are these
ones here if I go back layer three one to five year, or zero to five year the for first ten,
one to ten so that's the next step. And then finally the next filter is to assess whatever is
remaining and really at this stage they should only be about five to fifteen suburbs still in
the mix we need to assess them through the lens of the remaining layer three and layer
two o growth factors so we assess them through the remaining eleven to fifteen one to
seven here and then these two boxes as well. Of course, we want to keep an eye out
for the Australian wide factors but like I said before the Australian wide factors really
don't help us decide where to buy because these factors impact basically all places in
Australia fairly equally and but still to round out understanding of the over property
markets and give up give us a really good context and rich inside into a what's
happening and why is that happening, we still need to know these factors and review
them. Really it goes one to ten then eleven to fifteen one to seven in these to appear.
So that's the filtering mechanism, and of the fifteen thousand suburbs across Australia,
because we're using a data lead methodology, or data lead system there at any one
time generally speaking around three thousand eight hundred or let's say four
thousands of those twelve of those fifteen thousand suburbs that are statistically reliable
and what that means is that there have been enough listings on the market and there
have been enough sales in the market every single month for the data in that suburb to
really be relied upon right it's a bit like sample size if the sample size is too low then it's
not really representative of what's going on. Right if you took a , let's say you went to a
high school and you sampled five students in it and asked them what they thought of
the gymnasium, you know what they say is probably not going to be representative of
what the average person thinks an average student thinks because we've only sampled
five students sets of it like that, where the sales and the where the listings are very low
in a particular suburb, you know we can't really say that the data for that some of his
reliable and so therefore we can't assess their suburb using data and without data it's
very hard to assess a suburb. So, of the fifteen thousand suburbs across Australia any
one time there's generally about four thousand or three thousand eight hundred that are
actually distance statistically reliable so this methodology is a bit like a fisherman's net
right. We will catch the big fish, don’t worry about that but some suburbs that still may
grow in value we may not have identified because there was only one sale every two
months and we just couldn't trust the data that was coming out hadn't that's not to say it
won't grow but by looking at data we wouldn't have been able to analyze and confidently
invest their so it's a bit like a fisherman's that will catch the big fish and they'll be plenty
of suburbs that you can invest in that will do well, but they will be some because we just
weren't confident in the data that slip through the net. And so that's the filtering
mechanism and those three bullet points of demonstrated here illustrated here
graphically. And on the right hand side I’m coming back to what I was talking about
before around deep factor understanding. So, what I’m teaching you is scientific and
based on data. But there's no perfect algorithm that exactly predicts capital growth you
know what you can't do is this is to say will based on all data suburb ex is going to grow
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Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 8
Property Investment Accelerator
by exactly seven point two percent next year, you can't do that. So, there's no magic
formula, and the reason for that is because not all the factors that we need to analyze
are actually quantitative, not everything is data some of these things a qualitative. There
are things that we need to understand there are quantitative factors you know a little bit
like, you know what's the slope of the land on a house right that's not quantitative so we
can't put that into a formula, and also it's important to understand the trends of all of
these factors even though factor may be performing really strongly today or this month ,
it may not mean that that suburb is going to that factor is going to perform strongly next
month, we need to analyze the trends for the last three months the last six months the
last twelve months the last thirty six months to be able to understand what's really going
on here. And also, we want to understand factor tradeoffs. So, we can’t, you'll never find
a suburb that is just perfect across each of these factors right here that a suburb that
she's perfect and ticks all the right boxes and every single factor won't exist. So
therefore, we need to understand how do we make those tradeoffs. Some of the factor
is a good some of them a bad for a particular suburb what waiting to ascribe to each
factor, and by understanding the trends, by understanding the tradeoffs that we can
make we can make good decisions. Right so yes, it's scientific it is a science based on
the filtering mechanism based on data but at the same time it's an art. And the art is
these two things here and that's what I also going to be teaching you this week. So, it's
an art as well as a science, and together these two things form basically how we select
a location that will grow in the short term the long term and all the while give us positive
cash flow, add to our income from day one and ultimately allows to buy more more
properties to retrieve the passive income that allows us to do what we want to do with
the people that we want to do that with. Okay so let's now apply the theory that I have
spoken about and actually apply it so let's put it into practice. So, what you you'll see in
the subsequent slides the subsequent pages and I’ll just flick through them very briefly
just so you can see what's going on. You can see on the top right that there's a legend
is a key that's sort of scrolling between different parts of those six boxes that we
introduced that I introduced you to before so that's how these the system as is going to
work. What I’m going to do is I’m going to introduce you to the factors is within a
particular box in this case it's the suburb layer, layer three. The suburb growth factors in
the short term one to five years which is a priority number one sequentially. This is
where we start and then what I’m going to do so ill introduce you to these things these
categories so the factor you know the target the target flexibility the target rush now and
then for the same box I’m going to this is the same factors I’ll introduce you to their
relative importance and where to get the data and I’ll do a demonstration of the data as
well, of how to actually apply it. Okay so and then that's how we continue so for the next
box introduce you to the fact is and then the data factors data et cetera. So that's how
we're going to go through this. So, let's start with his bottom left box layer three suburb
growth factors short term and priority number one this is where we start sequentially,
and so there are fifteen factors here, and these are they all go through them one by one
and here's the target so this is the basically the threshold or you know what the data
needs to be within for us to say yeah, the suburb is showing signs that demand is higher
or greater than supply. Remember demand needs to be greater than supply right now
for us to be confident that this suburb will grow in the short term which is what we want
as well as the long term of course. And then this target flexibility. So, know every suburb
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Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 9
Property Investment Accelerator
will be perfect perfectly within the targets that I’ve identified here. So there needs to be
some flexibility but that flexibility is different, based on what factor we're looking at and
I’ve developed these targets, and I’ve developed these flexibilities based on a lot of
statistical research. Myself and a team of data scientists we've run various regression
models multi varied regressions except for to understand the
45 Minutes to 60 Minutes
combination of variables or factors that are important, what the targets need to be and
how flexible we can be are on the target, while still ensuring a really really good
outcome in terms of capital growth. Okay so there's a lot of science that is behind this.
In the video chats the that we have I can introduce you to that science and we can go
into it but for now this is really all you need to know, and then finally the target rationale.
So, here's some high level points on why this factor is important why this target is what
it is and the flexibility but I’ll explain that right now. So, let's start number one rent a
proportion. What this is saying is that out of all of the investment properties within a
particular suburb how many or what percentage are rental properties or are investment
properties? So, we want that percentage to be between fifteen and thirty five percent.
Anything more than thirty five percent means that there are a lot of investment property
so what that would mean is that, when it comes time for a tenant to search for a rental
that tenant has so many options that if you have an investment property in that suburb
your vacancy rate might be higher than you want it to be, but also the price increase or
the rent increase that you can achieve every year may not be possible a main may be
quite low. Simply because there are so many investment properties or rentals in that
particular suburb. But equally the minimum is fifteen percent and the reason for that is if
there are two little rental properties in a suburb that's actually a symptom or a sign that
tenants don't really want to live in that suburb and therefore there aren't many investors
that actually by in that suburb for investment purposes. Right so it's not that we want to
really high number or a really low number we want something in the middle. So, fifteen
to thirty five percent and in terms of flexibility we are you can see that the lower the
flexibility the stricter we are on this target, the higher the flexibility the more lenient we
are on this target. So, for this one we’re amber or we’re somewhere in the middle which
means that we're not super strict so if we find a suburb that has a lot going for it and the
renter proportion is sort of up to about forty percent were okay with it it's not ideal but
will let it slide. Equally if the renter proportion is down to about ten percent once again
not ideal other things would have to be working for the suburb but it's okay, we'll be
okay with it. So that's how you interpret the target flexibility. These flexibilities are static
so this is based like I said on statistical research. we don't slide them left or right or
anything like that this is based on years of insight. Factor number two is vacancy rate
and you can see that there's a little black triangle next to it which simply means that it's
part of your individual strategy so for someone on a very very high income you may not
need a very low vacancy rate, because you can afford to have a month's worth the
vacancy every year. But regardless of your strategy, my recommendation when it
comes to assessing the potential growth of a suburb in the short term is that we want a
vacancy rate of less than two percent. Okay, so any vacancy rate above two percent will
not only mean that vacancy periods will be higher so more time between tenants the but
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 10
Property Investment Accelerator
also, it's a little bit off putting for potential investors and so therefore the demand from
investors will be small and investors constitute about thirty to forty percent of all home
buyers right it's pretty large sometimes that number can go up two fifty sixty percent
depending on the suburban or city that you're looking at. So, if we are saying that
vacancy rate is high above two percent then you're alienating those investors those
investors that investment side of the market and that's reducing demand so that's going
to lead to pretty low capital growth outcomes. So, we’re pretty strict on that we don't
really want to budge anything more than two percent. Number three is auction
clearance rate. So, auction clearance rate means that for, in all the auctions that
happened within a week or within a month and a particular suburb how many of them
were actually successful? So how many of them actually had bidders the bid at or
above the reserve price and the property was actually sold or successful so we want
this number to be at least sixty percent. You can see the flexibility is very high and the
reason the flexibility is very high is that this number can sometimes be quite misleading
it can be misleading because a) auctions or really most prevalent only in Melbourne
parts of Sydney and other some other sort of pockets around Australia mostly premium
type suburbs, did not really prevalent and Darwin Perth Tasmania, Adelaide , Brisbane
so often times the number the percent that you see for auction clearance rate in these
other areas doesn't quite make sense they might be one auction and the auction rate
might be hundred percent because it was sold but that's once again not statistically
reliable data. And even if the auction is happening in somewhere like Melbourne we're
auctions a quiet common and popular, sometimes still it's not a good indicator because
let's say eighty percent of auctions and a particular suburb, sorry eighty percent of
properties and a particular suburb was sold through auction, but if there was only three
properties actually that was sold within a month then once again the sample sizes pretty
low and the auction clearance rate would be pretty high eighty percent but it's not really
that reliable. So, depending on the suburb we take number three with a grain of salt but
nonetheless it's a good indicator. And I’ll demonstrate all of these to you with a practical
demonstration as well. Number four is days on market so what this is saying is how long
is it taking for the average property within a suburb to actually sell. You know the days
that have passed between the date it was listed for sale and the day it was under
contract or when an offer was accepted and we want that number of days to be less
than fifty. So just a backup a little bit the renter proportion was a demand side metric,
vacancy rate is a demand side metric, auction clearance rate is a demand side metrics,
allows us to understand the demand not necessarily supply days on market is also a
demand on demand side metric right so if it's taking you anything more than fifty days
you know to sell a property within a particular suburb it was taking you to months or
anything like that and that tells us that you know demand is pretty soft you know
otherwise it wouldn't take us sixty days or two months to sell a property so we want this
to be less than fifty days and that is a sign was a symptom that demand a strong. The
flexibility as you can see is fairly ambers a fairly flexible and I normally say anything up
to about fifty five is okay, but we really don't want to be approaching sixty days or
anything like that now of course everything else is really really strong then we might
take it up to sixty days but in the normal course of events I really want to stick under fifty
or fifty five at the worst. Number five is average vendor discounting. So what average
vendor discounting means is, it actually has nothing to do with valuation, all it means is
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 11
Property Investment Accelerator
that relative to the initial price that the vendor advertised the property at. What did the
property end up actually selling for? So generally speaking, the vendors expect too
much and it ends up being sold for something less than that. Now whatever the
valuation the true value of the property was is something completely independent to
what I just said so, this number average vendor discounting percentage is just a sign or
at once again it's a demand side metric of you know if vendors are having to discount a
lot that means that demand is pretty soft, but if vendors aren't really having to discount
that much to sell a property than demand is quite high. So, we want the target to be less
than five percent in other words some discounting is okay, but we want that discounting
to be less than five percent. We are amber in terms of the flexibility but it's more on the
on the strict side of amber so five point five, six percent as is okay, but really nothing
more than six percent even six percent as a bit of a stretch. Number six is our first
supply side metric so number one to five would demand side number six as supply side
and remember the ultimate goal is to try to understand the balance of demand and
supply. So, number six stock on market. What this is saying is at any one moment in
time let's say a month of all the properties that exist in a particular suburb how many are
for sale? They may be investment properties, they may be owner occupiers we don't
really care or we are interested in is of all the properties that exist in a suburb how many
are on sale or for sale, and we want that number to be less than one percent. Let's say
number one two five was really strong they were all really high so we know demand is
very high but then the stock on market was three percent or four percent that tells us
that even though demand is high, supply is also high and therefore prices are unlikely to
grow in the short term. So, we want it to be less than one percent were little bit flexible
as you can see but in this context that sort of means going up to about one point three
one point for one point five percent, nothing really over one point five percent. Even that
would be a stretch and other thing would need to be pretty good for us to you know go
that far. Number seven is twelve month rolling average online search interest ratio. It's a
bit of her a have a mouthful. But what this is saying is that over the last twelve months
on average on a monthly basis on average, how many people on real estate dot com
and domain have been clicking into a particular suburb. So, on average over the last
twelve months what is the monthly average of the number of people clicking into a
particular suburb online, and that expressed as a ratio over the number of properties
actually for sale in that suburb is what this metric is. So, we wanted to be above five fifty
to one which means that in the average month over the last twelve months there was
one property for sale and five hundred and four fifty people were clicking into it. If there
were two properties for sale than the ratio would be two twenty five to one which would
be lower than what our threshold or our target is. Okay so this is a really really powerful
leading indicator of course not all of the has five fifty people, whether they're unique or
people law or duplicate you know people coming again and then again back into the
suburb online regardless of that, of course the not all buying the property but it's a really
good leading indicator of you know what the popularity of that suburb is you know if
there's more people clicking into it than that is telling us that you know there is
something going in this than the suburb that it's so popular and the trend of course for
all of these are very important to analyze. So, we're quite strict on that you can see it's a
red we really don't want it to be anything lower than five fifty, ideally you want this to be
much higher. Number eight is gross yield percentage so remember gross yield is your
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 12
Property Investment Accelerator
annual rent expressed as a percentage of the total the purchase price of the property.
So, this has a black triangle next to it because it's part of your strategy as we've
discussed many times now. So of course, just like vacancy rate if you're a high income
earner you may not need a very high gross yield. You may not need a positive income
property, but regardless what my recommendation is for the purpose of preserving your
borrowing capacity for the
60 Minutes to 75 Minutes
future you should buy properties with the growth field of at least five percent, now of
course, sorry at least four percent. Now of course four percent itself is quite low that
certain negatively geared property, so ideally if we want a positive cash flow property
were looking for a yield at least five point five percent, that will give us a positive income
property before tax and of five percent ish gross yield will give us a positive income
property after tax. Remember depreciation is the difference between pretax and posttax as we've gone through and week number one. But regardless of all that stuff, what
I’m saying here is regardless of your strategy, you should be buying in a suburb where
the gross healed is at least four percent and the reason for that is even if you can afford
something less than that most investors can't and investors make up at least thirty
percent of Australian residential property market and therefore have a big impact on
demand and subsequently growth. So even if you can't afford it the average person
can't and therefore, you're alienating the average investor which is going to take a hit on
demand and subsequently price growth. So four percent is the minimum and in terms of
flexibility although we're a little bit flexible on this, you know I’d really say don't go
anything less than four percent the reason we're flexible on this is that you were for a
very particular reason maybe you're not looking to recruit a large portfolio maybe are
only looking to buy one property and you want it to be in Sydney's lowered north shore
for a very particular reason, in which case you could be flexible on this and of course
you'd need to go below four percent, but that would be a completely different strategy
and an exception rather than the rule. Number nine. Demand to supply ratio know of
bolded this because this is really important what demand to supply ratio is basically a
summation of factors number one to eight. So, it takes the various demand side factors
and the supply side factors such as stock on market and it gives us a good balance or a
good understanding of what the balances between demand and supply so anything over
fifty percent means that demand is more than supply for right now and therefore there is
pressure on prices to increase. The extent of which that pressure will actually lead to
price increase is something we still need to talk about. If supply is greater than demand
and the percent will be less than fifty percent okay. So, at the very minimum we’re
looking for where demand is high than supply, but we want something that's at least
seventy three how can really, we want something that seventy five or above but at the
very minimum seventy three and we’re very strict on that. This factor alone isn't the
gospel so this is not the only thing that we look at sometimes people think well if it's the
summation of all these eight than I can just ignore these eight and just look at this that's
not a good way to think because we need to not only understand the trend of demand to
supply the we need to understand the trend of each of these things as well each of
these factors and demand to supply ratio could be really high but if these things are
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 13
Property Investment Accelerator
trending in the wrong way then what that is meaning is that were buying at the boom of
a market let's say Sydney and two thousand and sixteen many suburbs would have had
demand supply ratio really really high and if you just followed this number you would
have bought right at the boom and lost a lot of money in the next two years. But a
sophisticated investor in my clients we were buying very strategically at that time
because yes demand to supply ratio was high, we were seeing these trends the trends
for each of these factors showing that term you know really, we were not trending
positively anymore it was starting to go backwards so that even though it was still high it
was starting to go backwards or starting to level out at the very minimum. So, I’ll take
you through that in more detail but we want that demand to supply ratio to be at least
seventy three percent. Number ten, thirty six month median value growth rate. So, what
this is saying and once again were relatively strict on this. What we're saying here is
that even is factors one to nine are really making us excited you know we've found
we're finding suburbs that a ticking the boxes that within the threshold the flexibility is
okay demand to supply ratio is high everything is looking pretty encouraging, if it is
looking encouraging, but over the last three years the median value or prices and that
suburb of grown by more than fifteen percent, then the what that tells us is that even
though everything is looking good and prices may continue to grow we've missed the
bottom of the market. Okay so we've not boarded at the bottom of the market now
prices may continue to grow and they may grow another fifteen percent another thirty
percent another fifty percent or more but I would prefer and I would prefer you to buy
suburbs where we’re closer to the bottom of the market. Okay because it's a big risk of
a suburb is still showing signs of growth of short term growth but it's already grown by
let's say fifteen or twenty percent then, it's a fairly large risk, you know to say that it will it
will continue that run. It's not the case that suburbs grow by fifty percent and then level
off. Often times they grow very incrementally, and if they've already had growth of
fifteen percent in the last thirty six months, they may not achieve that growth you know
for the next few years. So that's really important to note we are flexible we are strict on
the sorry you can see it's a red, but the red as you know to the right of these other reds
it's almost becoming an amber so if everything else is really really really strong and the
trends are also encouraging, then sometimes we can say okay let's be more flexible
let’s say this is okay to be up to twenty percent. Okay, but if things aren't that strong and
it it’s the already grown by fifteen percent then were discounting their suburb were
saying no, we're not really interested in buying there. So hopefully that's all making
sense so far and what I’m going to do now is before I go to factors eleven to fifteen, I’m
going to do a practical demonstration of how to actually apply these first ten factors
okay. These first ten factors are the first filter that we, you know that we look at when
selecting our location. So, remember we applied our strategy and then were applying
the first ten of layer threes one to five year growth factors so those are the ones that I’ve
just talked you through and what I’m going to do now is I’m going to demonstrate how to
do that exactly. So, over the page and I’ll come back to this over the page, I've
illustrated for you the data sources and way to actually get everything all of the started
but for factors number one to ten by and large the most consistent data sources this
dsrdata.com.au. So, I’m going to go to that right now and give you a practical
demonstration of how it works. So, I’m on the right now, I might need to login because
I’ve been on this for a while. Okay so when you come, to this site you'll see this pricing
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 14
Property Investment Accelerator
page. Now of all the data factors and all the data sources that I’ve included in the
system, I’ve gone out of my way to make sure that we're reducing costs and we're not
paying for data unnecessarily. Almost every factor you can go to a paid source the you'll
be spending thousands of dollars in just suburb research, which I’m sure you don't want
to do. Right so in my entire system, the way that I have sourced the data is that this is
the only one that you actually need to pay for and the way that I’ve developed my
system is by getting the very very raw data just data dumps you know we're talking big
data of hundreds of thousands of of rows et cetera, and that's how I’ve conducted the
statistical research in the regression analysis to teach you everything that I’m teaching
you and I’ve basically done it for myself and that's how I invested in property and that's
how I got confidence that I’m actually doing the right thing and that's how have achieved
the results I’ve achieved and that's worked for countless clients. But you don't need to
get the role data you don't even need to get the pro version, everything that I’m teaching
you is included in the light version which is complemented by everything else that we
haven't actually gone through yet. Right so you don't need this pro version my system is
going to be covering much more than what this version is doing but we do need at least
the data that's available in the light version okay. And the power in this data is that there
are multiple research houses within property markets that get data, you know the type
of data that we've been talking about so far. There is rezdex, there is core logic, rp data,
there is APM, there is others there's about half a dozen and data houses that compile
this data. The problem is that they don't, none of them individually have all the data that
we want. So if you go to core logic whilst it's really handy you know what you need to do
as you need to download pdf reports, static pdf reports for each suburb and that makes
it basically impossible to compare fifteen thousand suburbs your you'd need to
download fifteen thousand pdfs, and somehow compare them or print them out and put
them on the wall around your house I don't know how you do that, so that's why a none
of these other data houses are research houses have all the data that we want and
secondly they're not in the format that we want in a pdf reports and so forth and thirdly
each of them has a different methodology of how they report that data. So, you might
have found in your property research before doing this cause that you go to one website
and the median value for a suburb is five hundred thousand dollars, and you go to
another website and the median value for that same suburb is five hundred and eighty
thousand dollars and so that's kind of leaving you scratching your head on what's
actually going on. The power in this tool DSR data is the fact that it's taking the raw data
from all of these other research houses and it's normalizing that data. So, it’s taking the
average so if these three different research houses with three different median values
for a suburb what we're going to see through this data sources the average so it's
consistent, it's reliable. So that's why I go for it, it does cost money hundred and fifty
eight dollars a month but there is no lock and contracts so you don't need to actually
have the data for more than a month what most clients do is that when they come to
week number two, they subscribe to the light version and then once they've done their
analysis, which in terms of elapsed time you know actually hours spent really shouldn't
be anything more than five hours. Now of course you may not be able to do all five
thousand and one go so regardless of how busy you I really don't need this data for
more than a month. Okay, so therefore there's no lock and contracts after the month as
finish you can simply unsubscribe and therefore the total cost is a hundred and fifty
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 15
Property Investment Accelerator
eight dollars. You’ll see that this is well worth it and there's really no other free way to
get all of the dollar that we want to get in a way that consumable and allows us to do
what we need to do to become confident in our location selection. So that being said
once you finish this week's course go right ahead and subscribe to this, I have no
affiliation with this this website to date so this money is not coming to me but going
straight into you know to rewarding the people that have compiled this data and this is
raw data which is what I love. So, when you do subscribe to that you'll go in and you will
go to the data, you click up your data and you'll see these four options. Now in order for
us to start applying our filtering mechanism which is right here, what we want to do is
we want to go to market matcher. And within market matcher, it asks us to put in for
types
75 Minutes to 90 Minutes
of criteria - location criteria, property type criteria, statistical search criteria and display
and sorting criteria. So, I’m teach you exactly what we need to put in here to follow the
system that I’m teaching you some terms of location search criteria. It gives us an
option do we want to select our suburbs by state in which case we can either take all
these states or we can on take any states that we have no interest in selecting sorry
and in investing within. I don't recommend that I recommend leaving everything open
because you want to maximize your chance of find a good finding a good suburb. One
that will make you money in the short term and long term. The only slight caveat that I’ll
say is ACT. So easy to the thing with ACT is that the land tax rates, I’m and land tax is
basically a state government tax on a particular value of holdings you haven't and
housing and land value. The thing with act is that they don't provide a threshold at which
you don't need to pay land tax. So most other states when fact all states depending on
of course your ownership structure which will get to and week six, they say that up to a
certain land value that say four hundred thousand you don't need to pay any land tax
that an act need to stop paying that from the very beginning. Okay so that means that
you know there's a next extra expense and that extra expense means that for you to
buy a positive cash flow property, you know where we needed about a five point five
yield before, you know five point five percent in act you need something more above six
percent or maybe even six and a half percent. So just keep that in mind it is harder to
find genuinely positive cash flow property in act you might want on tick that but of
course you can play around with it and do a scenario we have ticked it and another
scenario we've unticked it. So, you can do it that way, and then it says refine the search
area within the selected states. So, you can say okay search only within capital cities so
remember and week one we talked about your strategy on whether you had a risk
appetite to buy a regional or just capital cities so this is where you can apply that, or it
allows you to say search only within the selected LGA means local government area
basically like a council like Brisbane city council. I don't recommend you doing that
because you've basically alienated so many potential high growing suburbs if you're
getting too specific too soon. So, you can either select just within capital cities
depending on your strategy or you can completely on select this all together which
means you're just opening up all fifteen thousand suburbs for yourself. The other option
that this gives you his to search by map area. So, let's say for some reason you're only
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 16
Property Investment Accelerator
interested in investing in a particular area let's say that area was Newcastle so you take
that feature and you'd own in on just Newcastle. You can also you can also make the
circle a triangle a sorry a rectangle but anyways I generally recommend you don't use
this feature unless you have very specific purpose or you only want to buy in your
backyard which generally speaking is not a good strategy, because you're alienating so
many suburbs I could do much better than buying in your backyard, and you know I’ll be
teaching you in the subsequent weeks how to overcome the fear of buying interstate or
in another city and how to do all of your due diligence and be comfortable buying there.
So, let's cross out of this and say look now we're back on the state were happy to buy
anywhere. Okay, so the next thing we've done that we click that property search criteria
this gives us an option for houses and units in this tool the definition of a unit includes
high rise apartments, it also includes flats you know or townhouses basically everything
apart from a freestanding house. So obviously over the over the long term in Australia,
houses have outperformed units or let's say apartments or town houses, but if you're
applying my methodology and selecting a very very high growth suburb, then even if
you do buy a unit and when I say unit, I don't mean a fifty a story apartment tower I
mean a very strategic unit which I’ll teach you as well. Even if you do by unit like a
townhouse, it should be okay you'll actually make of a lot of money in that as well. So,
for some investors who have more of an affordable budget let's say under three
hundred or three fifty thousand dollars you may want to leave both of these ticked. Or if
you want to be very very very risk averse you may want to untick units and only go for
freestanding houses but I recommend you at least to the analysis across both because
as long as you're following a set criteria which I’ll explain this weekend next week even
if you buy a unit will do very very well so for now let's leave both of these ticked and
we've done that, and statistical search criteria. So, this is where we enter in our
strategy. Right so you can see the typical value that's the DSR’s version of median
value and the reason it's called typical value is that it's taken the median value from
various data sources various research houses and it's given you the average so it's
reliable. So, we want to put in our typical value based on what we've developed the
price point range that we've developed alongside the broker the mortgage broker. So,
we want to click edit, and you want to put in the real number so let's say we are
interested in houses and units between three hundred thousand and am going to
change that to five hundred thousand. Save. Demand to supply ratio so remember we
talked about demand to supply ratio as the is a good summary of the short term
demand and supply factors. So, we want that demand to supply ratio like I explained
before to be at least seventy three on them on the low side. So we save that down, it
can be as high as possible but at least seventy three. Statistical reliability, so the great
thing about this tool and once again the reason why it's money well spent is because
where there are very low listings, or very low sales volume in a particular suburb, this
tool actually tells us and it tells us you know that hey even though there his data the
reliability of that data is a bit circumspect you know it's a bit quote unquote sketchy. So,
you may not actually want to make a decision based on this data so when I talk to the to
the guys who built this tool, they say that the minimum statistical reliability that were
looking for in in what we want to interpret is sixty three. It's not a percentage it's a
statistical term but I won't bore you with that you just need to put in sixty three at the
max can be the max. Gross rental yield once again this is a product of your strategy, the
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 17
Property Investment Accelerator
extent to which you want that house or unit to be positive cash flow of course if you're
buying a house and there's no strada costs but with the unit you need to pay for the
corporate levies, which often means that you need a slightly higher rental yield for it to
be positive cash flow but you know for now let's say we're putting in we want something
that's positive cash flow after tax let's say five percent. And the maxim can be the
maximum. And there's one other aspect of your strategy that we put in and so we say
here adds statistic and we click this and we type in vacancy rate, that was the other
component of our strategy and we want the maximum vacancy rate to be two percent
as I’ve described before. So, there you go we put in our strategy which was which was
the first step enough filtering mechanism. So, you put that here we can close that down
and lastly display and sorting criteria. So, by putting in these criteria it's going to shortlist
the fifteen thousand suburbs across Australia to whatever is meeting these criteria but
we want to sort them, we want to order them from highest to lowest based on
something. And that something is demand to supply ratio. So, there's so many things in
here you can just ignore all of those things. In the system what I’ve taught you so far
and what's to come all cover all of these things and in a lot of more detail and in
different ways that make more sense. So don't get confused and go off on attention just
to stay with me and follow what I’m teaching it works. Demand to supply ratio, what we
want to do is we want to just in the sought precedence we want to click default and hit
one, and all that saying is that all the results that this tool shows us we want to fill we
want to order them from the highest demand to supply ratio to the lowest. So, we've
done that and now we show a matching market. When we click this, it shows us all the
suburbs that will within the criteria So you can see here, that of all the fifteen thousand
suburbs across Australia, the criteria that we put in meant that only one hundred and
ten actually still made the grade okay. And you can see the if I change the criteria let's
say I went back in statistical search criteria and I said that my vacancy you sorry my
gross yield needs to be higher I want it at five point five percent-say that you know show
matching markets, now there's only fifty three suburbs. So, all of a sudden there are a
whole bunch less suburbs that have made the grade. If I go even more strict and say
look you know I was interested in units before and now my only interest in houses show
matching markets, I’ll just do that again. The formatting is a bit off here, but you can see
now there's only thirty two suburbs in the in the mix okay so if I go back here and I say,
you know actually a refined my typical range and I know that I can only go three
hundred to four hundred thousand save now it's going to give me even less only twenty
seven suburbs that make the grade. Okay so we'll just go back here and say I’m open to
houses and units I want to look everywhere, gross rental yield of five and a half that's
okay three hundred four hundred, once again this is on the formatting is a bit glitching
but the numbers are right. But what this is saying is basically thirty nine entries am just
going to fix this, much bigger and the formatting is better, thirty nine suburbs that made
the grade according to that specific strategy. Okay, so you can see how powerful this
tool is all of a sudden were already down to have top forty suburbs that's still a lot of
suburbs. But at least we're starting to shortlist them you know. So, you can easily see
where the suburbs are so the state we can see the post code, you can even click the
postcode so if I don't know where chigwell is and I can just click this post code, and it
brings up a map and I know that it is just north west of Tasmania of Hobart sorry in
Tasmania, so that's pretty handy and you have closed that down. Tells you whether the
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 18
Property Investment Accelerator
property is a house or a unit right so if you want to go back in remove all units you can
do so in that will reduce your thirty nine considerably tells you the suburb the typical
value most importantly it gives you the order of the demand to supply ratio. So, we'd put
the minimum demand to supply ratio at seventy three so the minimum down here will be
seventy three that's the cut off. Vacancy rate that's all going to be less than two percent
and the gross yield we put a minimum of five percent, so it's not going to shows any
suburbs less than I think if they put five point five percent. Okay so the process from
here is what we want to do is we want to leave that open and open up DSR again, and
last time we went to market matcher remember this is the market matcher feature and
this time what we want to do is we want to go to suburb analyzer
90 Minutes to 105 Minutes
right and we want to go to suburb analyzer because we have our top suburbs as per
layer three short term growth factors sorry filtering mechanism, but now what we want to
do is we actually want to go back here and we want to actually see whether these
factors are hitting out thresholds, what the trends are you know things like that. So, you
know don't be overwhelmed by the fact that this tool forty suburbs of course you can
refine your strategy to be more specific but this is a good number of suburbs to analyze
I recommend at this stage not having anything less than twenty. But at this point what
we're doing is we're analyzing each suburb individually and it doesn't actually take that
long the first couple of times as you’re still understanding it might take a bit of time but
as you do it more and more it, she doesn't take very long and so the first you want to
analyzes is Chigwell. So, control see that copy it over here and in Chigwell we were
interested in houses, so don't click units but houses because here it said houses. So,
this tool actually tells us the DSR based on whether it's a house or unit so it's quite
specific. So, we come back here in the suburb analyzers it’s not giving us data for
Chigwell, and this these factors at the exact same factors that I’m taking you through
here factors number one to ten okay the order is slightly different but they are the exact
same factors. So, what we want to be doing is we want to be going through one by one
each and every factor in assessing whether it's hitting our threshold what the trend is,
and overall, our assessment of the suburb based on the factors that we've discussed so
far. There are more factors to come home but you know where we need to start filtering
these. So the first one is demand to supply ratio and we want to click this history so of
course the current value is eighty six , our threshold was seventy three so we’re quite
happy, and what we want to see the history so click history and it tells us, how that
demand to supply ratio effect has fared over the last thirty six months or three is so at
the time of recording it's actually July so the latest data is for June and you can see that
the it goes back about thirty six months. So, when we're analyzing trends, we want to
see how stable or encouraging is the trend so for demand to supply ratio particularly or
in fact all of these, we want to at least see the last six to nine months and we want to
see some solidarity. So, let's say right now it was eighty six but the last month it was
down below seventy five and then the previous month it was high but then the previous
month to that it was low again that wouldn't that sort of volatility wouldn't give us much
confidence. So, we want to see a so suburb that is showing either positive trajectory you
know the increasing or at least remaining stable above a threshold. It just comes back
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 19
Property Investment Accelerator
to the analogy that I shared with you before around a pressure cooker know if a
pressure cooker has you know steam building up but then someone comes along and
let's that steam out by lifting the whistle at the top of it, then even though the steam was
building up you know that someone's come along and let the steam out, then it's not
going to whistle right so the same thing with property markets. We want the strength to
be stable and you know meaning that the gas the pressure for prices to grow is bubbling
away is simmering is steaming up know that pressure is increasing. If all of a sudden
there's a couple of months within the last six or nine months where the numbers low
than that's kind of like letting the steam out which means that the pressure is no longer
building up as fast and that means that prices now may not grow right. So, we talked
about back here we talked about yes there's a filtering mechanism but we're actually
need to understand these trends okay so this is what I’m going through now I’m
teaching had understand these trends. So, this is actually a really perfect a really model
suburb and that's why it was number one. We're quite happy with this. The last like I
said when analyzing these trends, the last six to nine months of the most important but
that that also depends on a few things that will teach you. Auction clearance rate, so it's
no didn't seem to be any auctions there and it's unsurprising because it’s from
Tasmania, but that's okay we were very flexible on that. Typical value so three forty
seven thousand dollars and let's see how this suburb has feared in the last three years
three years ago you could buy that in Chigwell for two hundred and twenty five
thousand dollars, and at the time of recording prices are three hundred fifty. So, the
there is a pretty significant price growth, of about a hundred and twenty five thousand
dollars. A hundred and twenty five thousand dollars on a growth on a base of two twenty
five is much more than fifteen percent right. So automatically what we would say is
although this is really you know nice to see, when we go to our system the thirty six
month median value growth rate is much much more than fifteen percent therefore,
we're not happy with this suburb. We wouldn't even analyze it further right like we
wouldn't waste our time. So that that's why I want to demonstrate but for the purposes
of this practical demonstrate demonstration let's just go through the suburb and go
through the other factors but when it comes to going through these thirty nine shortlisted
suburbs, I wouldn't even spend more time on Chigwell see can see how the process
that actually won't take that long. You know just about bring that up again actually, this
is a type of suburb that if you followed the system that I’m teaching you would have
bought in two thousand and sixteen or two thousand and seventeen and you would
have achieved these results. So, the great thing about what I’m teaching you is that you
can actually apply it retrospectively in the in history and just see whether it's picking
suburbs that are that actually did do well right so that it's a self-proving system which is
which is what I love and you can gain a lot of confidence in it that way. The percentage
rent is on market is thirty five point five percent that's within the within our range. And it's
been pretty stable the way that the tool reports renters on market is always stable, you
don't need normally have to look at history you just have to look it statistical sorry just
need to look at the actual value. So, you know what we were okay to go up to thirty five
percent that's fine. Often times when this is much higher let's say fifty percent, we would
say look that's absolutely we don't want to go near the suburb the that is too high right.
The rent to proportion we only wanted to go up to thirty five percent of fifty percent is too
high if it was fifty percent. But why don't we want it to be fifty percent? Remember this is
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Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 20
Property Investment Accelerator
once again I’m trying to explain to the reason so you can understand the reason why we
don't want it to be too high is too many rental properties means too much competition
for property investors, you know there are only a finite amount of renters and if there's
too many investment properties than prices are unlikely to grow and rental prices and
vacancy is likely to be higher. So, let's say this was fifty percent but vacancy rate was
very very low like it is for the suburb we would then be able to say okay even though
this is fifty percent hypothetically I’m okay with that because the reason why we didn't
want it to be high was because a vacancy is actually low, so that means there's actually
a lot tenants there and there's an ability for that tenant pool to absorb so much supply of
rental properties. So hopefully that's making sense you know there's a couple of these
factors that it's not cut and dry it's not binary, we are flexible to some extent depending
on the underlying reasons. Days on market twenty days we want it to be less than fifty
so is really good and you can see it's kind of your last three to six months or the trend
over the last thirty six months is really good generally low or decreasing which is good,
last six to nine months her you know pretty stable if not decreasing. So had the prices
not already increased by forty odd percent, the suburb would be really attractive. Where
there are gaps in the data that just means that there wasn't enough listings or sales and
the data in the suburb for the data to be reliable. You can ignore them. Percentage stop
or a gross rental yield see you can see that the gross rental yield is quite good in the
suburb when we bought their three or four years ago it was even you know it was good,
you know even higher so is just a terrific suburb to buy in. So the gross rental you is
kind of been reducing but as kind of held its own right so what that means is that on one
hand prices have grown the typical value has grown, but if gross rental yields have been
pretty stable in at least for the last year or so, then what that means is that rents are
grown, okay because rental yield is just the rent divided by the as a as a percentage of
the total price so prices have grown and rental yields are the same that means rents
have grown. So that's a really really good outcome. So, this is once again a really good
suburban unsurprising that it's at the very top of the list in terms of demand to supply
ratio, but if you just go up had the demand to supply ratio, we would be making it a
horrible mistake because it's already grown in value so much. Stock on market we want
to be less than one percent as per the system and it is and in fact it some it's been for
the last sixty nine months been trending downwards or pretty good, we could just ignore
these gaps just means has not been many listings or sales. A vacancy rates basically
zero you can see it's kind of volatile but the axis is so small we want the vacancy rate to
be less than two percent, it's ever been in the last three years as point five percent so
even though it's volatile it's this the axis is very small, so would be you or of I’m very
happy with that. Statistical reliability and this are one of the problems with the suburb so
yes at sixty three right now which means it just makes the grade in terms of what
statistically reliable. Let's see historically how this statistic reliability has been. So you
can see that since about may two thousand and nineteen, for about the last year old
data that we look at is reliable it's above sixty or sixty three but in this period here, the
reliability score was less than sixty which means that we can't really rely on this data
right so that's how you interpret it right now we can and for the last year or so we can
but here we can so when it comes to days on market in this this period here we can't
really rely on that data with precision the gross rental yield you can't really rely on that
data with precision so when you do research a suburb make sure you click this and just
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Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 21
Property Investment Accelerator
take any periods where their reliability is less than sixty three just with a grain of salt,
anything less than fifty is just absolutely terrible but anything less than say sixteen is to
be taken with a grain or sixty three nice to be taken with a grain of salt. Average vendor
discounting so if you remember back here, we were okay with an average vendor
discounting of up to five percent but actually in this suburb there is no discounting in
fact, vendors get more than what they've listed at this negative discounting and -it's
pretty pretty good pretty stable. I think I missed one actually was online search interest
ratio. So, we want that to be five fifty to one and you can see here that it's the trends
been really really good I’m and it's much higher than five fifty to one it's about fifteen
hundred to one. Every single just one thing to note every single
105 Minutes to 120 Minutes
suburb across Australia sees the spike between September October November last
year that's just a change and methodology of reporting the statistic in this tool so every
single suburb will experience that said that doesn't mean that all of a sudden, this
suburb of got really popular you can just ignore everything before about November last
year for all suburbs across Australia. So, it's really the last six to nine months that were
that were most concerned with but still it's very good here you see. So, see so it's
unsurprising you know and you know this is how the system is self-proving it’s
unsurprising that the typical value has been so strong as and has continued to grow
okay. That's one example let's do another example, let's take let's take this, which one
should we do, let’s take Salisbury Park in south Australia so this is an Adelaide, I’ll put
that in Salis houses. So, I’m just going through another example see you guys can get a
really good idea of how to do this. Demand to supply ratio seventy seven so its above
our threshold, no I don't like this little trough that's means that the steam has been let
out a little bit but for the last six to nine months it's not too bad you know you can
definitely find better than this but it's not too bad I wouldn't discount it based on this
alone but I wouldn't be over the moon either. Option clearance rates doesn't happen,
typical value, can see his bring pretty stable not really any increase in typical value what
I do like is that just and the last month or two there's been a bit of a upswing and when
that exists then that's a really encouraging sign because it shows that you know
something's just a bit, something might just happen here I’m so on one hand prices
haven't increased by more than fifteen percent over the last three years which was one
of the which was one of the criteria, but we get more and more confident when there's
just been a slight uptick in price in the last three or seven months or the last three six
months. Just starting to happen it's not really happened for more than one or two
months consecutively so it's not it's not giving us too much confidence but it's nice to
see. Percentage renters on market that's where the not threshold days on market very
low and it's actually reducing so you know, you know that that slight take up in price
what we saw on the previous chart does marry what this had is happening here where
you can sell the property in the last couple of months of it a bit quicker than you were
before so I like that last six to nine months have been good, so that that shows good
sign online search interest. Once again, the trend in the last six to nine months has
been quite good trending upwards, gross rental yield this is a positive cash flow property
and has been stable so rents and not increased the not decreased either. Ideally we
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 22
Property Investment Accelerator
wanted to see rents increase but that's okay, the stock on mark is less than one
percent, here is a bit of a problem so, you know they were just on a couple of months
ago there were just a little bit higher which I don't like to see I would have liked to have
seen it consistently less than one percent so you know we wouldn't want that number to
go up again I wouldn't be rushing to buy in the suburb it's not a bad suburb of I won't be
rushing in I’d probably wanted to monitor or whether this continues to go down one or
two months or goes back up. What are we up to vacancy rate basically nonexistent so
you’re not going to have any issues finding a tenant statistical reliability, okay so it's
okay for the last year everything that we see is reliable before that not really so much for
about nine or so months for at least for the last year it's reliable so that's okay. An
average vendor discounting so there is no discounting in fact you get slightly more than
what the vendor had listed at falls as a bit of a premium so that's good to see. So, you
know juxtapose or compare this to Chigwell clearly not as attractive but still you know I
wouldn't have any qualms in and potentially investing here, I’d probably want to want to
monitor it for one or two months just to see if those some of those data points you know
continue to track well or when they faded away there's a few discrepancies like this this
little, the trough here and stop on market this little hike here which we didn't like. This is
a good example of potentially very good suburb. I also want to demonstrate one other
thing. So you might say look this Salisbury park it's been not at seventy five percent but
close to seventy five percent DSR why hasn't it, increased in price why hasn’t increased
in value, and that's one of the reasons once again I want to stress that you can't just
take the demand supply ratio, and just use that as gospel you do need to analyze all of
these things in order to estimate price growth right and when you go through each of
these individual things like days on market, you know you can see why price growth
didn't happen, you know it's above the threshold that we wanted to be for much of the
time even though the overall demand supplies not too bad going to show you one other
example right now and Thirtyhills in this is a suburb in Brisbane northwest abridgement
about ten kilometers from the city. I haven't picked it from here of I just know this one.
So, demand to supply ratio. You can see here this is a really good really good suburb
right so for the last three years by and large it's been at or above seventy five percent
demand supply ratio. Of course, there's been some dips here where the steams been
let out and the last three to six months, haven't been haven't been terrific, so let's say
we were doing this analysis in November two thousand and eighteen. You would say
look PK you've taught us that we need to analyze the last six to nine months and last six
months at least seems to be above the threshold. So, if we applied your system here
then we should have expected price growth but why is this happened and why have
prices actually not really grown so we would have invested was it let me get that
accurate, November two thousand and eighteen the last six months were good,
potentially you would say PK you to told us to invest in this suburban November two
thousand and eighteen, but let's see what prices did from November two thousand and
eighteen. They basically just went flat I mean there’s slight increase in here the basically
flat so what went wrong this system doesn't work -and this is what I want to demonstrate
for you right so what I’m showing you here is not the entire process for suburbs
selection right we've only done factors number one to ten there are other factors that we
need to consider and yes by applying this system you would have in or you could have
in November two thousand and eighteen said Ferny hills is in a short list. But if you just
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 23
Property Investment Accelerator
left it there and gone ahead and bought a property in Ferny Hills, you would have been
disappointed, and the reason for that is you would have ignored everything else that I’m
about to teach you and so what's really happened and this is a real thing in Ferny hills,
is it the building approvals was much too high and therefore the supply side than the
next, your two and a half years there was so many more units and houses being do in
that suburban around that suburb that that soaked up that sort of latent demand that
factors number one to ten indicated. Okay so I’m just wanting to make the point here
that don't think that just because, you've done factors one to ten they can ignore the rest
and you can go ahead and safely invest that know you do need to apply the entire
system. Okay and phony hills as a really good example of that. So, what we want to do
is what we, I want to do is we want to repeat this exercise of what I’ve done for
Chigwell, and we want to do it for all of the suburbs that come up here now. I can tell
you that most of the Tasmania ones have grown already too far too fast so you can just
discount them you know you could easily discount them by doing a quick review. So, it
actually doesn't take you hours and hours to do that piece of work should take you less
than an hour or two at tops to get down from thirty nine suburbs to the ones that actually
still look appealing once you once you run through this analysis okay. And in fact you
may not even want to start with thirty nine suburbs you may want to go back and hone
in your typical value a little bit more you might want to hone in your gross rental yield a
little bit more except for I’m but at the same time I always suggest don't have anything
less than twenty suburbs at this stage so if your strategy is super precise and you've
only gotten or fifteen suburbs at this stage you need to go back and broaden your
strategy because you might be missing out suburbs that adjust on the fringe of making it
to this level. Actually, really good suburbs that once you apply the subsequent parts of
my methodology, they actually say they're actually becoming more and more and more
attractive, so you don't want to just lose suburbs because you've been a little bit too
strict too soon if that makes sense. Okay. So that is the DSR tool and that's how to use
it and of course as you go along and do this you can hop onto the video calls that we’ll
have and ask me questions and discuss and things like that. Okay, so far using that
data source DSR we have analyzed the first ten factors and using our review of those
ten factors we have shortlisted the potential suburbs from all across Australia down to
hopefully what is now a list of under fifteen okay. So, at this point once we've reviewed
the or filtered through the first ten factors you should still have at least ten suburbs but
hopefully not anything more than fifteen right, so that's the kind of rule of thumb you
know this is not a perfect formula, anything more than fifteen at this point is just not
needed, there’s plenty of fish in the sea, but you don't need to analyze every single one
of them you've already found your top ones. So having done these first ten factors using
the DSR tool you should really at this stage have anywhere between ten and fifteen
suburbs still in the mix and what I want you to do at this point is use this tool that I’ve
included in the download section called the property investment accelerators suburb
selection workbook right. And what this workbook allows you to do is so that you don't
have to memorize everything all the analysis you've done so far for the ten to fifteen
suburbs that you've shortlisted to date, so far based on the first ten factors I want you to
use this workbook to put in the information so each tab is a different suburb as you can
see each tab is identical, and how it works is, you know as I say here only fill this out for
the top , let me zoom in a little bit so you can see a bit better only fill this out for the top
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 24
Property Investment Accelerator
five to fifteen suburbs out of the dsl to process I say five to fifteen but you know I really
want you to have at least ten to fifteen here. Worst case scenario five to fifteen but you
should aim to have at least ten to fifteen at this stage. So, what I want you to do is go
right ahead and put in the information, and the insights that you've you know allocated
and reviewed into this workbook. So, you can start actually putting, and jotting down
your homework right can actually start doing your homework, and you don't have to
memorize all this data so how it works is, going from top to bottom first and they're the
same factors that I run you through the layer three suburb growth factors one to five
years prior the number one so this is this exact one right here. So go ahead and put in
the results from factors number one to ten that's what we've done so far. If I go down
this eleven to fifteen which will talk about soon then there's lay at three sub of growth
factors six to fifteen years, priority number two and when we come to it that's where
we'd go through that than there is layer two city town growth factors, short term priority
number three and then layer two city town growth factors long term priority number four.
And so will fill all of this in for every suburb but at this stage we've only done number
one to ten. So I want you to go and populated right.
120 Minutes to 135 Minutes
So, what I say here going from left to right now is whether that factor was a demand will
supply side factor or both. Whether it was a quantitative or qualitative factor, you know
some are purely quant, some a qualt of so far, the top ten have been quantitative we've
looked at data. Here's the actual factors these exact same as what you see here okay
nothing new. Here is the thing that I want you to fill up so. Four columns. The first
column is does the data meet the target, so does the data for this suburb you can even
change this by double clicking it and actually just putting in the suburb name, does the
data for this suburb for this factor meet the target and there's a dropdown. So, you can
click this little arrow here and say yeah it does. And this is exactly what we've just
analyzed right, we’ve just analyzed it based on all of this stuff right here. So, does do
these numbers meet threshold? Let’s go back here so yes or no. It didn't. Just because
it didn't meet it for one factor doesn't mean that it you know it can't make out top fifteen
suburbs right. We look at the totality. No, it didn't or it wasn't great but it was okay
because we're pretty flexible and that factor so you consider the flexibility said I’ve
provided here or you know the data was just not reliable it was under sixty three or
something like that. Or the target was not applicable, but I’m satisfied so sofa or
everything that I’ve taught you has targets but as you see down here some of these are
not applicable. So when we come down to those factors this drop down will become
more relevant, there's no specific target that we're looking for but I’m satisfied anyway
all there wasn't any specific target that I was looking for and I’m unsatisfied right so that
would be red this would be a green, and so as you fill this out you can kind of get a
sense of how much reds amber greens there are ,as you as you fill this out then you put
in your rationale and your observations you can put the numbers in any thoughts that
you may have or anything like that just so you can put it on paper you not you can't
memorize this stuff for fifteen suburbs right. So that's the target. But remember we want
to analyze the trends as well and on I know have been harping on about this point but
we want to analyze the trends. Okay we can't just look at the data at a moment in time,
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 25
Property Investment Accelerator
so if I go back to the workbook is the trend is the historical trend encouraging so for
most of these we want to look at six month trends or six to nine month trends like I’ve
described so rent a proportion yep it was within the target, will the is it within the target
right now for the month that we're looking at right now, but for the last six months and of
the target yeah the turn the or the trend is good it's but stable or it's increasing, you
know or became more positive or actually not even though it's good right now the last
six and nine months of have not been encouraging, or it's kind of on the fence you know
it's not great the trend but it's not too bad either way we're kind of okay with it. Or the
data it’s just not reliable at some point over the last six to nine months it's been under
sixty three percent statistical reliability. So that's what we’d put in there. Okay so if you
have something like this where the current data for the most recent month that meet the
target and the trend is encouraging than that's a good thing. But if the current target is
being met but the trend is not encouraging then that basically cancels out this as well
right so we wouldn't be okay with the renter proportion as a factor within the suburb
because the trend is being bad and so you get the idea right. As you go through this you
can start to see how many greens there are how many reds there are how many
ambers there are, and that allows you and to come back here which have been
stressing we've looked at the trends that allows you to make the factor tradeoffs. Okay
so remember here and I haven't gone through this and a lot of detail yet but for the first
ten factors, on this page I’ve given you their relative importance. Okay I’m just going to
be super clear. The flexibility was how flexible we are on these targets within the
specific factor. Right so here we were happy to go up to about forty percent or down to
about ten percent. The importance is the relative importance of this factor versus
another factor okay, so it's a different from flexibility. So, let's say we found a suburb
where it was really bad in this factor it was really bad and this factor, really bad and this
factor but it was really good in this fact a really good in this fact a really good in this
factor, we would say that that suburbs not great because it's only good in the factors
that have less importance and really bad at the factors that have high and importance
okay. So hopefully that's making sense and the way we apply that is back here. So, we
assess how what are green what are amber, what are red. If you are having a lot of reds
that are in factors that have high importance than that's telling you that the suburb is not
really that great; whereas if you're having a lot of greens in ah greens everywhere will
that's great but if you haven't lots of greens and factors that are important and ambers
or reds and in that one or two ambers or reds or less than three you know sort of am
busy roads a less for ambers and reds but they're mostly around these factors that are
less important than you know it the suburb might still be okay. There's no perfect
formula for how good a suburb is or not but by doing this analysis we can overall get a
sense of what's going on okay. So, at this stage when not actually culling any other
suburbs out because we've not finished all the factors and but with simply filling this
table in. and we're doing this for every suburb. Okay. So, if I go back here what I want to
do now is go through factors number eleven to fifteen. Right. So, number ten is so I let
number eleven is twelve month rent growth rate and we want that the target is we want
the rents to have increased by at least five percent in the last year. That's a really really
good outcome you know when rent start increasing that means that tenants have more
more demand for that suburb and ultimately what that results in is you know people start
to prefer that suburb more and more owner occupiers start to want to move into that
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 26
Property Investment Accelerator
suburb. When tenants start to demand a suburb more and more and that's reflected in
price increases in rent, then more more investors start to come into that suburb as well
because the yield start to improve right so you can see how that's a really positive sign.
It's a sign of, you know sustainable demand. So, you want that in the last twelve months
for the rental growth rate to be five percent ideally now that's pretty rare, and that's why
the flexibility is quite high. We'd be happy with any increase or even flat you know in
terms of that flexibility. When the rent starts to go backwards that's when we start to
become a little bit cautious of that suburb that anything neutral a positive is good.
Number twelve is accessibility infrastructure and number thirteen his job infrastructure.
Okay so I’m going to talk about this I’m a lot of the time what property investors do as
they say that okay let's just find infrastructure projects and lets just base our investment
decisions on where an infrastructure project is coming up. It might be a five hundred
million dollar project or a billion dollar project or something like that. Novice investors
follow the money. Sophisticated investors follow the outcomes of that money. So, I’m
going to say that again novice investors follow the money you know they see a media
article a billion dollars spent on an infrastructure project they follow that, whereas
sophisticated investors follow the outcomes of that money the outcomes being assess
ability and jobs. So, you may have an infrastructure project, where there is a new train
line coming or new train station, but if the train station doesn't actually reduce commute
times for people to and from work then even though that's a five hundred million dollar
train station or train line, it's actually not improved demand for that suburb and the really
good example of that is Bella vista in north and west Sydney in western Sydney. Really
good area really posh area. Before you had to catch a bus into the city took you about
more than an hour, now they have a train station there, but it still takes more than an
hour to get into the cities to have to change in a line once or two times. So yes, there is
really nice infrastructure there, but has it improved accessibility has it actually and when
I say assess ability, I mean travel times has it reduced travel times not really. Okay so,
sophisticated investors we need to see through that stuff. Right so, there's not really any
target you know that we have on that the I can't say that you know only by in a suburb
where travel times have been reduced by twenty minutes or something like that this is
just a nice to have you know it's if we follow these top ten or top eleven factors and
these infrastructure than that's super nice to have but we don't cull out a suburb just
because it doesn't exist and that's why we're so flexible. And number thirteen his job
infrastructure, so what we're considering here is okay we'll even though they might be a
billion dollars spent on a particular project once the construction finishes how many
sustainable jobs will be there. You know, how many people will actually need to will
actually find work in that because of that project that infrastructure project and therefore
want to move closer and live in that particular suburb where the infrastructure project
happened. Okay so sometimes you have like a in northern Brisbane, in the Morton Bay
council there's a new university. Now when people think of new university they will
automatically think of university of Queensland or the scale and size of university of new
south Wales or university of Melbourne. This new university over the twenty thirty years
will be will be large but in the first five years it's really going to be less than one or two or
three thousand students okay. And how many how many jobs will that create. You don't
need a thousand lectures four thousand students you might need yeah and I’m no
expert but let's say twenty lecturers at the very max maybe less than that and maybe
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Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 27
Property Investment Accelerator
twenty admin staff and marketing folks and cleaners and things like that maybe a total
of fifty to one hundred jobs. Tops hundred fifty jobs. Okay so hundred and fifty jobs are
created by this massive university project. But do all those people need to live close to
the university? Absolutely not I mean people travel to and from work all the time so of
those one fifty jobs how many of those employees will actually move closer to the
university probably less than half or even much less than that. So, you can see a pit you
know we're on the face of it would have been a five hundred million or billion dollar
project I had I don't know how much that one was, but in are just going with that number
actually doesn't shift the dial in terms of jobs that much
135 Minutes to 150 Minutes
yes, you might say will university students might move in and that might be the case but
those university students help what percentage of students were actually want to move
close to the university. There are thousands of students that go to university of
Queensland that live more than half an hour away from the university of Queensland,
same with any other university around Australia. So as sophisticated property investors
we really want to see through the media headlines, we really need to see beyond this
stuff, and not assess the dollars being spent but the outcome of those dollars being
spent and there are so many investors probably in the hundreds if not thousands that
have invested close to that university in places like Petri and calendar, and in the last
five years’ experience next to no growth and same with Bella vista the train station
example the last forty five years and Bella vista is not it really experience massive
growth because of that train station and so you can be sorely disappointed and that's
why were very flexible on it and I’m saying it's only accessibility how much travel times
reduce and only the number of jobs. We want travel times to reduce by at least ten
fifteen minutes for it to be meaningful and we want jobs to increase by at least two three
four hundred if not more. I would almost start off by saying three four five hundred, you
know for it to have an impact on our suburb in terms of demand and subsequently
prices okay. So and so that's that one now of course infrastructure does have a big
impact on property prices but only the right type of infrastructure. Only the top of
infrastructure that after the construction phase you know those the steady average after
the initial jobs is created those temporary construction jobs after that how many
sustainable jobs are created that's what we're looking for. Number fourteen is eighteen
month building approvals. So, number eleven was demand, number twelve was
demand number, thirteen was a demand side metric or factor number fourteen and
fifteen a supply side factors, so number fourteen this is saying that in the last eighteen
months how many building approvals has the local council provided developers. So that
they can build houses or units in that suburb. And this is really powerful because even
if factors one to thirteen a really strong if you're finding that the local council in the last
eighteen months is approved you know four hundred five hundred six hundred in a
building approvals, even let's say three hundred four hundred five hundred six hundred
buildings to be you know houses to be built effectively then that means that all that
additional stop coming onto the market all that additional housing coming onto the
market is going to diluent the additional done and that we're seeing and prices are going
to actually increase. Now of course know the extent to which while the number of
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 28
Property Investment Accelerator
building approvals that causes us concern is dependent on the size of the suburb but a
good rule of thumb to work off is if there's more than three hundred building approvals in
the last eighteen months then that's an issue, and we want to really investigate that
further and potentially that suburb is you're not poised for price growth in the short term.
So what we want to look for a spikes so in a particular month they might be five
approvals another month ten approvals another month six approvals and then the next
month is a hundred and fifty approvals and that tells us that a big land developer like
stock lenders come in and sought building approvals to develop a house and land
packages for example and the more of them that of being produced them all supply is
increasing and it really comes back if I can come all the way back here if supply
increasing than and even if demand is increasing was still at equilibrium prices aren't
going to go up. And number fifteen last one on this page is developable land supply. So,
what this means is even before building approvals are sought by the by the developers
how much developable land is there to actually even be developed. So, what we're
looking for here as farmland paddocks large blocks like large acreages where you know
these old houses that can be subdivided and ten houses be put in place of one, if
there's enough of them then you know that in the future there can be hundreds of new
houses being developed in the suburb. So once again the litmus test or the threshold
barometer is you know is their scope for another three hundred four hundred five
hundred new houses or units to be built in the suburb if there is then even if demand is
so strong that potential supply if and when it does come online and if demand a strong it
will come online because developers are incentivized to build that will soak up this the
demand and prices weren't increase. So, I haven't put a specific target on these
because it really depends suburb to suburb but a good rule of thumb is you know more
than three hundred building approvals and or more than potential for three hundred also
or plus in your potential buildings in the future say buildings, I’m in residential houses or
units. If there’s sports fields or if there’s heritage listed or national parks or the anything
like that than of course that's not going to be developable the definition of developable is
when this farm land or open green space that isn't really being used. Okay so a very
strict on this one the building approvals because there is a number, we already know
that number real a little bit lenient on developable than supply because it may or may
not happen or minutes is a good chance of it actually happening, but we don't notice
were little bit more lenient. Okay so we've been through the fifteen factors now on this
page. Here are the same exact fifteen factors but now I’ve given you their relative
importance So this is once again just like the targets and just like the flexibility of those
targets this is based on a lot of statistical regression analysis which I won't bore you with
but this is how you can use the relativity ease of importance to really assess the
strength of a suburb so we've already filled in the top ten factors in our workbook so
now we've done the other five factors so I would like you to go ahead and fill in the ten
to fifteen factors and come just follow the same process in terms of I’m selecting from
the drop down and also the historical trend and whether that's encouraging some of
these boxes have been greyed out where the trend actually is not a clickable or useful
like infrastructure is either happening or it's not. The same would developable land it's
either there or it's not. So, you can go ahead and fill this out. On this I’ve also provided
you with the data sources. You can see that for one to ten the main data sources
dsr.com.au which have already taken you through on some of these there is an
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 29
Property Investment Accelerator
alternate data source that helps you triangulate that data. When I say triangulate it's just
another data source it will have a slightly different number because it is a different data
house a data source. But it should give you more confidence in what's actually going on
right so for example in fact a number two that in vacancy rate we can also go to this
sqm data source so if I go to that, I’ll reach this right here so this is what you'll see and
for vacancy rate for a particular postcode this allows you to say this allows you to find
what the you know the specific factor is. Actually, this one is I should be clicking
vacancy rate right here. Okay so you might need to go down here in just click the right
statistic the here we were looking at vacancy rate, so if I go and click on that link it
brings this up and for this post code on this is a ferny hills postcard the of that I took you
through earlier you can see this is how vacancy is tracking right. So once again we
already know this is in the DSR tool but this is another tool another data source free that
allows us to double check, and really understand what's going on. So, this gives us
more granularity you can see it's quite volatile because vacancy rates are seasonal.
And so that that's how to interpret that. The other data source down here for gross yield
this to data sources other than two years or so if you go to them, you bring up this so
gross yield gives us this it was actually what was on here before gross rental yield. So,
for this suburb Ferny hills you can see that the gross rental you'd this is how it's been
tracking you can select by clicking these you can just select all houses or if you just
want to go all units you can on selectors and just select or units and just review the
trends that way it gives you longer history than the DSR tool did. For gross yield there's
also this other data source, and then sort of giving you you'd that's giving you the actual
rent amount which I think is quite interesting sensitive yield it's actually telling you what
rent you can expect. And you can just you know if this is your suburb to invest in you
can go and put this in the portfolio budgeting tool from week number one in and start to
play around with that so once again you can select houses you just click these three if
we just want houses or if you just want units you to select units, you select nothing you
get nothing but all houses you can see in ferny hills ten twelve kilometers northwest of
Brisbane CBD rents have been pretty stable for the last five years but before that they
were increasing nicely. Okay so, it's quite interesting for us to see and is also table
down here that allows us to quickly answer for ourselves you know some questions so
for example the twelve month rental or growth rate. Twelve months change you can see
all houses the growth rate has been negatives and not a great place to potentially invest
here. When you see the difference between all houses and three bedrooms you just
need to look at the numbers here. So, all this five hundred five houses, and the number
of three bedroom houses is four hundred and thirty eight. So, there are some houses
that are not three bedroom but really the majority a three bedroom so I’ll be looking at
this number more than this number. Okay, so actually it is positive it's not too bad.
Some other data sources thirty six month median value growth rate so we already know
that from the DSR tool that is another couple of web sites I’m here that are provided you
all go to them right now. So weekly asking property prices this allows us to understand
what the increase in the last thirty six months has been and once again this table down
here summarizes it really well so in the last three years the change has been in this
suburb once again ferny hills postcode four zero five has been positive for both all
houses and three bedrooms. The majority of houses are three bedders so the most
interesting stat is here this will be a little bit different to the DSR number, but that's why I
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 30
Property Investment Accelerator
provided it so you can you can have another data source just to build confidence in in
the numbers for yourself. There's also this website called on the house that I
recommend so that is this one here and you can just go in here and put in the suburb
and it gives you that statistic as well I won't go to it it's pretty self, you know explanatory
but the difference between sqm this and on the house is that sqm provides you the
statistics at the postcode level. Now you can have multiple suburbs within the postcode
so this is a bit more generic whereas the on the house data is so suburbs specific just
like the DSR tool was such a little bit more precise but once again by providing you
multiple data sources you know it's helping you understand what's going on. Thirty six
month median
150 Minutes to 165 Minutes
value growth rate just like before I provided you the sqm and on the house a website.
So sqm you know even though this as weekly rent we just go down and select you know
asking sales price and, on the house, same as before. We just put in the suburban it
tells us that for the last thirty six months what's been the median value growth rate. So
that's how you do that. The twelve month rental or growth rate once again, those same
to data sources again I won't go through it again I think you get the idea can you can
play around with them. Accessibility infrastructure and job infrastructure, so this new
you can do google research you can literally put in the suburb name or the locality name
and just search for infrastructure projects. You can go to the local council website and
you know see what's happening they will have any major projects listed there and
details, and you can also count call the council website so don't be afraid of calling them
and just asking questions like you know what infrastructure projects the going on they
may not know exactly how much travel time there that has been reduced or exactly how
many jobs have been created that you can get a fair estimation of that by calling them
looking at their website and doing google research. Building approvals is this other data
source right here and I will open it up now the I do recommend you open it and internet
explorer as opposed to Firefox or chrome. It does work better that way. And what you
want to be doing is opening it up, and this is what it looks like so you know initially it's a
lot to lot to look at, really you know you when you open it up it might look like this and at
the table might go a little bit funny but depending on which browser you using just put
this to the left, put this to the right and this is an interactive table that you can use it. Has
every city your local government area within it and it tells you what the building
approvals numbers have been so what I do is I click region, and of course is an error, I
can't let me just refresh that. Okay so see how this has gone a bit funny it might do that
for you but don't worry all you have to do is click region, and then here you have the
option to actually find your suburb. So don't be mistaken to think that is only new south
Wales if you scroll down there's all these other places as well, but you can just say
collapse everything, and then you can start from scratch and you can just find your
suburb or you can just type it here. So, if we want to look at ferny hills is type it in here
and you press enter. And these zero results found so, it might not have that suburb
listed as that suburb so what I want to do is I want to go out of that go click or region
again, and collapse all, and I want to find it manually so Australia I know phony hills as
and Queensland it's in greater Brisbane, you know it's in Brisbane west, you know it’s
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 31
Property Investment Accelerator
near the gap, it’s not in one of those so let's try for his in north, old hills, Brisbane West.
That that's basically you know how you go a phony grove, there it is so phony grove is
very close to phone is the neighboring suburb so so right here. So that's how you do it
some suburbs do come up so let's say I was putting in Banyo, which is close to the
airport in in in Brisbane so that has come up so it's just so view data, and it gives us the
data so what it's saying is the measures total number of dwelling units are we want to
go all sectors type of work, all work type of building. Really, we want to say a residential
building like houses but we what we really wanted to say is total residential. Okay so
you can play around with this is also commercial warehousing health and all that stuff,
but we're not concerned with commercial here with concerned with residential. So, you
hit that and then it tells you a month on month, how many buildings have been approved
or how many units of how many residential houses have been improved. You can
change the frequency to be quarterly if you want that to be you know be able to read
that easier. So let me change that I want to see remember for the last eighteen months
old put that is eighteen view data and now it'll give me the number of approvals for the
last eighteen months you can see in April two thousand and nineteen, that of anomaly
eighty seven whereas before it was two building approvals in December eighteen
January two than there was an anomaly seventy four eighty seven we want to see if
there's any other anomalies don’t seem to be. So, there are less than three hundred
ish,-building approvals in the suburbs who we're pretty happy with it. Okay so he
wouldn't discount it but you play around with that. So that was the building approvals
daughter and developable land supply you just go to google maps and look at satellite
view okay so. It's not that difficult to do but let me just have demonstrated for simplicity
so google maps, let’s bring that up and let's look at that same suburb so ferny hills so
we want to look at ferny hills which is right here so we want to go to satellite view and
we're looking for open spaces that could be developed okay so. So far all I’m seeing is
residential streets which is good, this seems like a golf course which they are unlikely to
develop same as here and is going on the border, this is forest, you can check out the
zoning of this as well in a subsequent daughter source said I’ll give you but they're
unlikely to chop down hundreds of trees for from new houses, this land here but that
looks like a cricket oval or something like that so that can't be developed. So, you can
see here that in this sub of itself there as isn't actually that much developable land
which is which is I’m encouraging for us we like that, that means that supply caught up
automatically and suddenly increase in the future. Okay so go back here so those are
the data sources for the first fifteen factors hopefully that made sense. So now what I’m
going to go through is, if you take your eyes to the top right, the second box that we're
going to look at and this is at the suburb level now the long term factors. Okay. So now
what we were doing is, having completed this work book for the suburb growth factors in
the short term we've done one to fifteen, now we're doing long term growth factors so
then this seven of them. So those seven of these number one is the level of amenity
which is schools, public transport shopping or parks. Right so most investors have
actually don't look at any of the stuff that I’ve taught you so far and they just look at how
close the suburbs does good schools public transport shopping and parks. That is
important it's not you know, it’s not inconsequential. But you can see this is not where
we start in terms of suburb selection a home so does very important and that's why
we're strict on it okay so being close to amenity over the long term has an impact does
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 32
Property Investment Accelerator
not going to mean in the short term prices are going to do anything but over the long
term it does have an impact. Number two is proximity and travel time to activity your job
centers So what we want to see here is not necessarily proximity to CBD so people
make the mistake of saying look I only want to buy a suburb that's close to the CBD but
in places like Brisbane there's multiple CBD. There is Morton Bay, there is Springfield
lakes, there is logan in Sydney this paramada, Liverpool eastern suburbs epping and
Melbourne there's multiple CBD is so really what we're trying to assess his you know if
we have a selection of two suburbs which is the closer one in terms of travel time to
activity or job centers you know where people work. Number three is household
incomes increasing faster than the state average. So, what this is saying is that for your
suburb between the two thousand and eleven and two thousand and sixteen census
year results, was the average household income between those two years increasing in
your suburb faster than it was for the overall state that it's in? I if it's increasing faster
than that means that over time, and this is not going to happen within five years, its six
to fifteen years. Over time the I’m you know the old beat up Honda’s are going to
transform into new a key is the key is going to transform into Honda’s the and to entry
level Audis the gentrification is happening. Okay so that's how we find that out and
obviously with incomes rising fast the ability to purchase more and more expensive
housing also. you know evolves and that increases house prices overtime once again
not in the short term we're talking long term here Number four his professional
occupation increasing faster than state average so once again between the two
thousand and eleven and two thousand and sixteen, census results census years has
the professional quote unquote occupation which basically means white collar work has
that increased in that suburb more or faster than the state average? The reason that's
important is that professional or white collar work is generally noted to be more stable
than blue collar work and generally as a as a generalization is higher paying now of
course there's always exceptions to that and many trades people make my much more
money than in office people but this is a generalization. And so, if and our suburb
professionals as a percentage of all workers are increasing faster than the professionals
and the entire state are increasing between two thousand and eleven two thousand and
sixteen than that bodes well for long term income stability and income increases as well.
In that suburb and that means that over the long term there is fundamentally demand to
increase prices. So you can see here that were off we're flexible on these three things it
means that we're not going to discount or rule out a suburb just because it's not perfect,
but it is meaningful at the same time and there's no target right so for these two were
just looking at the difference in rate of increase between the suburb and the state, and
in this one it's just a judgment call you know if you have ten suburbs in the mix you
know alongside all the other factors this just becomes another factor to consider
proximity to activity of job centers. Number five is ten year median value growth rate I’ll
just mention one more thing actually on number three and four set the time of recording
the most recent census date was two thousand and sixteen in the future twenty one is
when the next census is likely to happen so that's what you would review as well then.
Number five is ten year median value average growth rate so it's bit of a mouthful but
this is the exact same thing as thirty six month median value growth rate. So, all that we’
re looking for here is over the last ten years what has been the average growth rate for
the suburb? If it's been under seven percent were happy if it's been over seven percent
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 33
Property Investment Accelerator
were not so happy and the reason for that is that the long term average for the last thirty
five years in Australia is about seven percent and if our suburb that we're looking her
has already grown by more than seven percent in the last haven and last ten years on
average per
165 Minutes to 180 Minutes
annum then it's statistically you know simply statistically, unlikely that it will continue to
grow at more than seven percent. So just from a statistical perspective, we are we're
putting the odds against us and so therefore we like it when our suburb has grown at
average which is seven percent or ideally less than average which is less than seven
percent. Because over the next ten years you know if the long term Australian statistic
of seven percent is right than our one, our suburb is likely to grow at a good rate. So
pretty flexible on this a so we're were pretty strict on this if a suburb is already grown up
ten percent per annum on average over the last ten years, then we would be very
reticent on investing there. Number six and seven households where rent payments a
less than thirty percent of household income. So, households where rent payments so
the rental market affordability, rent payments are less than thirty percent of household
income. So, when rent payments or less than thirty percent of household income that
means that you know that's pretty affordable rents are affordable and so we want that
affordability to be the case for more than eighty five percent of renters in that suburb. If
that is the case and we know that they can afford that rent and that rent can also
increase in the future right and that's a good thing for us as property investors we want
our rents to increase in the future. Number seven households where mortgage
repayments are less than thirty percent of household income so six was renters this is
owner occupiers’ homeowners, we want that affordability to be the case for more than
ninety percent of an owner occupiers in that suburb, because if that's the case then we
know that they can afford that those mortgage payments and that means that if they can
afford them then this scope for prices to increase in the future. if more than ninety
percent of mortgage, I’m of homeowners can't afford the mortgage, then that means that
price increases are going to be very difficult because everyone's already stretched
already. Okay so you can see we're fairly flexible on those it's not like eighty five is the
absolute cut off or ninety as the absolute cut off though we do want that, that to be no
less than eighty and that to be really no less than you know eighty five I would say so
five percent margin of flexibility as a rule of thumb and the other thing to consider with
number seven is sometimes us is really really powerful metric to be able to find to be
able to find suburbs that are just going to grow and I’m going to tell you how. So, let's
say you have you know to suburbs side by side okay their next door neighbor suburbs.
both suburbs have the same income. Okay so the income and both suburbs as the
same, but if affordability in one suburb is higher than the others suburb then we know
then that the prices in the suburb that has more affordability can increase because it's
right next to another suburb where incomes are the same and they have less
affordability in other words prices are higher. So, if you have to suburbs that are next
door to each other and incomes of the same whereas one’s affordability is less than the
others like let's say one’s affordability was eighty five and the other one was ninety, the
one where affordability was more than ninety one, we know that that can come down to
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 34
Property Investment Accelerator
eighty five and people can still pay off their mortgages because it's been demonstrated
in the suburb next to them. So, when you find a suburb like that that's a sign of ripple
effect which means that you know prices can grow in that suburb because they've
grown right next to that suburb and people can still afford the payments, and that's an
arbitrage opportunity that's the opportunity for us to make money. Okay that growth is
very likely to happen. Don't be confused don't confuse ripple effect just by saying that
there is too suburb's neck to each other one’s price is higher than the other therefore
the one with a lower price can increase that's not the case. Incomes also need to be the
same for that logic to hold and that's where this affordability story comes in.
180 Minutes to 195 Minutes
Okay, so hopefully that makes sense, and once again these two from the census data
two thousand and eleven and two thousand and sixteen. Now obviously the two
thousand and sixteen done is quite old and that's why this is categorized and as a long
term factor when we compare, you know that two thousand and sixteen dollars were not
expecting short term results from that. Okay so the data sources for the seven factors
are provided here and I’ll go through them in a second but you can see here is the
relative importance so everything's know relative more important except for proximity to
activity and job centers. Okay that's the one that's relatively, relatively speaking, less
important not to say it's not important but that's the one we can trade off a little bit easier
as opposed to these others. Okay so where do we find this information so level of
amenity and we go to these two websites see microbes and your investment property
magazine. So, these are free sources so within micro burbs we want a good review the
family community and tranquility details. So, I’m going to go there right now. So here's
the micro burbs website I’m so it was saying review the family detail so ignore the score,
that is just something that they do we don't care about that at all and all we care about is
what I’ve already told you which is schools, public transport, shopping, park and you
can find how close these things are to your suburb by looking within the family category
you can see that the schools are listed here and the details you can look within, what
else was there the community and tranquility so community score within that you can
see where these various key sort of things are, community centers, and within the
tranquility details ,tranquility is here, you can see some of other things as well so those
are the three areas to check for schools public transport shopping and the and parks of
course you can just google research this as well it's pretty straightforward. The other
website as your investment property magazine so if you go on here and you put in the
same so ferny hills it also gives you more of some sort of written description of what
that suburb has or hasn't so, it's saying these two shopping districts in the nearby
around the hills and mitchellton that cater for the majority of the residents wants schools
and daycare centers are plentiful, three train stations in the vicinity. So, combining these
two sources you can easily answer factor number one. Factor number two proximity to
activity or job centers is also answered through the micro burbs website so if I go here
and I click on the family is it the convenient score. Convenient scores this one and it
tells us the work centers so the closest work center is Paddington and that's only eleven
kilometers away so that's not too far if it was only Toowomba, that would be a bit more
of an issue. And it gives other details like that. Factor number three household incomes
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 35
Property Investment Accelerator
increasing faster than the state average as with number four six and seven this is all
from the census and census data so if I go to that that's right here, sorry back on, back
on fact number two I didn't take you through the second website rate my agent. So
that's you know to find out where people actually work that live in the suburb you can
also confirm with a few really good property managers and to find good property
managers you go to this website called rate my agent which basically tells you the top
rated manages whether it's sales agents or property managers so what you do you want
to find agents just click sales and agents if you want to find manages you go leasing
and you put agencies and you just put your you know you're think I can type and Ferny
hills, and it will tell her tell me the top agencies that are in this so number one a century
one except for I can call these three up can just click them and you find their details and
you can ask them this information hey you know my property investor looking to buy
and phony hills can you tell me where the closest activity your job centers are way to
people normally travel to in order to get to work. Number three is like I said from census
information number three four six and seven is all from senses. So, if I go there this is
the census website when you click that link your come here. So, I’m already on banyo,
but if you go back and click this quick stats link, and you just scroll down you can put
your suburb in here. And before clicking go you just pick whether you want to see the
two thousand and sixteen results or you want to see the two thousand so two thousand
and eleven results or two thousand and sixteen results. And obviously for number three
and four were actually comparing the two thousand and eleven and sixteen results and
against each other. Okay so we want to go and go ahead and do both so, when you do
go into them you get this result and so you just want to scroll down and find the right
category so, for median weekly incomes I can see here said this would be the one for
factor number three, you want household incomes so the household income in Banyo in
two thousand and sixteen was this much and Queensland it was this much so what we
want to compare is this number and this number for Banyo and Queensland in two
thousand and eleven and see whether be I new increased faster than Queensland if it
did than that's a good sign. So that's basically the process for not factor four as well,
and similar process for and factor six and seven. Here we're not comparing two
thousand and eleven and sixteen but just looking at two thousand and sixteen but all of
that information is actually within here. All of this. The one that we didn't go through his
number five ten year median value average growth rate. So, what we're looking for here
is come over the last ten years what has been the average growth rate so we go to this
website on the house which is right here and if I put in ferny hills, brings that up, median
value median growth so it tells me the median growth the last ten years you can see
and it just gives me data point for each year. Right so here at six point eight six, here it's
eight point five to two point three six I just add all of those up individually and divide it by
the number of years and I have my average incomes pretty pretty straightforward. On
number six and seven in the data guidance I’ve also provided, I’ve also said that
because the data it is old it's from two thousand and sixteen which is fine because this
is a long term factor, but because it's old we want to just be cautious of any huge price
increase since two thousand and sixteen. So, let's say in two thousand and sixteen
mortgage repayments were very affordable, and what we want to what we want to say
is okay well it was affordable and two thousand and sixteen, but if prices have doubled
since two thousand and sixteen then has probably not going to be affordable anymore,
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 36
Property Investment Accelerator
because we know as a general rule that in Australia of the last five years household
incomes haven't really increased. Okay so you can you can apply that rule in Australia
over the last five years that say between two thousand and fifteen and twenty
,household incomes haven't really increased on average anywhere. So, if you apply that
rule than any time, you're using you're applying number seven, you have to be mindful if
the house value increased too rapidly know let's say more than twenty percent, and if
that was the case then that more affordability story is probably no longer the case. I's
probably no longer more than ninety percent. Because household’s incomes haven't
changed but, house values have and so the statistic would be dated and the same with
rent. If rents have gone through the roof and the last five years and your particular
suburb, you'll know how to get that information it's you'll already have it then you know
that this number that was under two thousand and sixteen senses stats is probably
inaccurate so that's a quick check in rents have increased massively or house prices
have increased massively then these two are not that reliable. But hopefully they
haven't you know and it all comes back to ; you know factor number ten here hopefully
in the last thirty six months or so we haven't actually experienced too much price growth
that's ideal. those are the data sources for that that will make sense what I’m going to
go through now is the next box up so layers two were finally on a to the city and town
growth factors okay so this is once again we're looking at short term. Right, so short
term growth factors in the city and town. So now by the stage you know that if I go to the
workbook by the stage, you've filled out the top fifteen here in this suburb of growth
factors in the long term be filled out these seven ,the seven that I’ve just been through
by the stage you have your list of fifteen suburbs even though you're still filling it out for
fifteen really you only should have about five suburbs still in the mix. You know by
applying all these factors you would have started to call you would have started to
shortlist your suburbs further. Okay and by going through systematically this process
which will take time initially and obviously you need to learn it as you are doing right
now, but as you go and do it for more more suburbs you just become faster and faster
better and better at it. Okay so that's how you do it so really at this stage when we come
to the city and town growth factors, you might have already got down to your top three
suburbs or top two suburbs. I you haven't than these become important. So, let's go
through now number one job infrastructure. So, we've already talked about this before
at the suburb level this time we're talking about it at the city or town level. So, what
we're looking for here, so let's go through these now, so city town growth factors short
term priority third. The first one is job infrastructure we've already gone through this
before it was all around making sure we see through the dollars spent on infrastructure
and actually assess you know a rough estimate of the number of jobs beyond just the
construction phase that will actually be sustainably created. Now, when it comes to city
and town growth factors, what we're trying to assess here is, is there any infrastructure
projects not necessarily in the suburb that we're looking at but an adjoining suburbs. So,
you know like a within a radius of am let's say five or ten kilometers is there any huge
projects that a going to create jobs because obviously, even if there isn't a new
infrastructure project in your suburb if there's one close by than that has a you know it
has an effect on the surrounding suburbs up to and including the sometimes up to five
to ten kilometer radius so that's really important for us to assess. And the way we do it is
the exact same way that we did it last time, but you can see that the target flexibility is
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 37
Property Investment Accelerator
very flexible right, so we're not going to rule out a suburb just because there isn't some
huge you know infrastructure project like west connects like a highway in Sydney or
something like that this is just nice to have. We've gone through number two before as
well eighteen month building approvals this time what we're looking at is not in our
suburb in a joining suburb so within a five kilometer type radius and that's very easy to
do and the tool that I’ve already introduced you to. In that sort of area is there any you
know huge spikes in building approval so you know same sort of quantum as before, if
each suburb had a threshold of about three hundred and there were four including
multiple suburbs and this mix then you just take a multiple. So, if you're looking at the
ten suburbs around your suburb then you want to have that threshold at about three
thousand three hundred times ten. Okay so hope hopefully that's making that's making
sense. And we are quite strict on that one right so if, if around our area within you know
the sort of ten or fifteen suburbs around us if there are literally thousands and
thousands and thousands of buildings been approved for building and then then that's
not a good sign okay. So, we're quite strict on that one relatively strict. We don't want
there to be no more than tool that say three thousand building approvals you know let's
say within five kilometers or so of were weren't looking to invest. And then, number
three five your job advertisements once again we are so flexible on this it's not going to
mean that we ruled out any suburbs, but if you have let's say threes for suburbs in the
mix still and you're looking at this city town growth factors you want to try to get that
number down by one or two suburbs so you want this the how the city or town is going
to fair and five your job advertisements what this means is a trend over the last five
years this is a really good way to assess how the economy for that city or town is fairing
and is going to fair because job advertisements is a leading indicator when someone
advertisers a job then chances are they'll fill that job so it's a really powerful leading
indicator of an economy in the future. Okay so a five your job advertisements are not
that difficult to actually find and it just rounds out our knowledge of that city in town and
like I said right at the beginning of this week's content things like five your job
advertisements they have more gravitas or they have more meaning when we're looking
at regional places. New Cadtle, Bendigo, Ballarat, Cairns, Woololongong, you know if
we're looking at big cities like Sydney Melbourne Brisbane, then you know even if job
advertisements on grade or if they're poor you know it is what it is. They're still going to
be good places to invest within that city but when we're looking to invest in a small place
a smaller town then the town has more of an impact the health of the city or town has
more of an impact on our individual suburb. So, this just gives you more rich content of
as a property investor, to make more wise decisions. So, you can see here on the next
page that the relative importance of these is quite different so number three is the least
important and that's not to say it's not important but it's the least relatively speaking. So
the data sources for job infrastructure look like before at when we did this at the suburb
level we want to do a google research ,we want to review the local council websites for
the areas around our suburb who want to call those local councils, don't be put off by all
of this work it's really not that time consuming you know it may be a five minute phone
call, a fifteen minute search on the web sites another fifteen minutes on google, and it's
not like we're doing this across fifteen suburbs right at this stage we really shouldn't
have more than five suburbs in the mix. For number one the data source the first one
I’ve given his hair and todd why in of said here that the report is quite interesting they
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 38
Property Investment Accelerator
publish it every month really good insights as to infrastructure and other things going on
and various locations that around Australia it also has a property clock, I said ignore the
clock because there is no such thing as a property clock. Suburbs don't boom and bust
in in a circular fashions’ property markets go up they may go stable for a long time they
may reduce or they may not reduce they may go up again, they may just stay first flat
and then just go increase again. t doesn't work and around way where you see a boom,
and then a bust and then a recovery in a boom and bust that's not how it works or just
ignore their property clock don't be distracted by it don't be, fooled into thinking that's
what you should follow it's really not please ignore it. In fact, if you do look at it
sometimes, you'll see that locations on their property clock go backwards so they go
from recovery back into stagnation and which in reality doesn't make the clock very
sensible at all. But what is useful is their commentary, so if I go to that website, it's here
right it's here and you click on this residential report that is published every month and
they do around the grounds of all cities towns regions across Australia and provide
really rich data for infrastructure jobs you know what's going on, and local economies
it's a really good way free of cost to stay abreast of the city and town factors. Eighteen
month building approvals so I’ve already taught you how to use that website. This time
instead of going to the individual suburb that you've located you want to go to the
suburbs around the suburb that you're interested in and job advertisements you go to
this website, now told you how to do it but just to demonstrate it what you have to do is
you go to the website , it's this one right here and you download the ivi regional data
may two thousand and ten onwards this excel see you need Microsoft excel obviously
for this and when you do download it and open it up it looks like this okay, and this gets
updated every month, and so all you need to do is go to the averaged tab and then what
I want you to do is you can see here that it's giving you different cities or towns or
regions and different professions, we are looking for jobs job advertisement data so
want you to highlight the entire row number one, okay and I want you to click, data at
the top and then click filter, and that allows you to than filter these things. Okay so this
allows us to then say on region, where do we want to look. So, let's say we were
interested in, let's say Ballret, and it would only now it is only showing me results for
Ballret but it's given me all these different job advertisement type data were just
interested in the total so you can ignore all that all of this stuff engineers, labors,
cleaners all that is included in the total and so what we want to do now is scroll across
these are all individual months okay. So, if you go over here this is the most recent
month June and if you just come all the way back here, you know this should be
probably let me just expand this is as two thousand and seventeen we want five years,
if I just expand all of these so if I, highlight all of these columns which you can do as
well, take it all the way to the right and then double click here it expands it's you can
actually see the months properly. So I want to go all the way that five years so we are in
twenty twenty now so when I go back all the way to start twenty fifth of two thousand
and fifteen let's say, so click Jan two thousand and fifteen, and then scroll all the way
over to the right, and highlight all that and then once that's highlighted come all the way
back, and hold down control on your keyboard and click that if you don't hit control while
you do this and that will disappear that highlighting you want to hold it and then you
want to highlight this all the way to the right as well. So, you can just press control shift
right to do that or you can do it manually so I’ve, hat I’ve done is I’ve selected the
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 39
Property Investment Accelerator
months and I’ve also selected the number of job advertisements for Ballaret total okay.
So that's what I’ve done and
195 Minutes to 210 Minutes
then you go to insert up the top here and I want to see it as a line chart I can easily
interpret it and that's all you need to do. I can expand this for readability, and so you can
see here and it's unsurprising because we're in the middle of covid right now that,
Ballaret is actually you don't see this here at ballaret has experienced some fantastic
price growth in some cases more than fifty to sixty percent price growth and property
market. So, here's one reason why that's happening since January two thousand and
fifteen to towards the end of two thousand and nineteen, you can see that job
advertisements which is through the roof, right those was four hundred back here , and
it was seven hundred at the top. So, you know not quite a fifty percent increase but a
huge increase in job advertisements. You don't really need to know what these numbers
mean of course a job advertisement but really the trend is what you're looking at but
then it's fallen off a cliff here. So when you look at this sort of thing, it tells you for that
overall region let let's say Bellarat in this instance you know or at being so small
comparatively speaking to a capital city, can we realistically expect massive house price
growth when job advertisements and a job advertisements are leading indicator for jobs,
when that's is so low and you can see it actually started to dip even in November two
thousand and nineteen so it's not entirely because of covid nineteen that this is
happening because that really came into for around march it already started happening.
So you know if you're a property investor looking at Ballaret even if everything that
we've discussed so far was looking really good, this would make you second guess your
that choice okay now I’m not saying don't invest in Ballarat in this instance they may still
be some good suburbs to invest in all I’m saying is that if you have an option if used to
have four five suburbs in the mix one of them as Ballarat and the others are outside
Ballarat you may need to take this into consideration when making that decision okay.
So that's five year job advertisements, and the data source. Then the city town growth
factors in the long term there just to the first one is diverse and diversifying employment
industries so what that means is we don't want to invest very strictly I’ll add we don't
want to invest in a town or sort of small regional area where the economy is not diverse
all right so we experience this when the mining bust happened so many people were
binding it buying and mining towns but when the mining industry went bust , coal prices
iron ore prices reduced then house prices reduced by up to eighty percent and that's
just because they had there was no other employment source and everyone left and
house prices fell through a roof fell through the floor sorry. So we want to you know only
be buying in areas that are either diversifying or diversified oversee the capital cities a
diversified if we spoke about Newcastle in the early you know two thousand tens it was
still predominantly mining focused but since about two thousand and thirteen fourteen
it's pivoted more towards into health care with hospitals, education, tourism and you
know a lot of clients were buying their and two thousand and fifteen and you've you
know you've made two three four hundred thousand dollars in that time. Would have
been would we have been buying there in two thousand and ten no because it wasn't
diverse that in two thousand and thirteen fourteen fifteen it was diversifying. So, if you
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 40
Property Investment Accelerator
still have any suburbs in the mix the original and are areas that aren’t diversified or
diversifying than you want to rule them out pretty strictly. Number two housing
affordability. This isn't really going to be something that is super powerful to eliminate
suburbs, and further cull your list but it gives you more rich content as to the affordability
story of an entire city or town so the two measures that we look at a share of income
required for repayments, we've discussed that before and the number of years it takes
to save a deposit okay. So, the raw daughter's actually not publicly available information
so I’ve given you a pdf report that you can review that still up to date but were pretty
flexible on this this is really just around off your knowledge of property markets more
than anything, like I said I’m the diversity of employment is very important, the housing
affordability story at the city or town level less so but still insightful. The data source for
number one is just google research you want to put in keywords are key terms like the
suburb name or the council’s name, job growth, employment, industry, economy, in
about ten or fifteen minutes you should know all that you need to know about how it's
diversifying or whether it's already diverse I’m so I’m sure some pie charts and other
things like that will come up. And that's the data of source for number two given you the
pages that a most useful as well. Right so really by this stage if I go back to our
workbook really but this stage you have completed the entire workbook okay so you
have gone through layer three short term layer three a long term layer two short term
layer two long term and you fill that out for the suburbs you started at about fifteen
suburbs and you may not even have filled this pit and for fifteen you might have already
chosen your top five, or six or seven and only feel listen for the top five or six or seven
in and really at this stage, come you know of the that say five suburbs that are still in the
mix or may maybe a little bit more it really just depends what we're doing is we're filling
this out so overall relative to the other suburbs in the shortlist I would rate the suburb as
x out of ten okay so this is just a subjective rating that you decide. it's just a help you
better understand for yourself how suburb one is better or worse than any other suburb.
Right and like I said before the way to do that is to fill in all of these boxes where they
aren't already grade out and you'll see a whole bunch of colors, and then you can make
a decision of whether a suburb is better than another by going in assessing these colors
and making tradeoffs based on these relative importance you know indications that I
provided you. Obviously the most are up here in the short term but even in the long term
at the suburb level they should provide a lot of insight so that you can go ahead and say
okay overall on balance the suburb is better than this one I’m and based on what okay
those tradeoffs the weightings of each factor, -and you can just rate it and go about it
that way back yourself you've done a lot of research you've done more research and
probably ninety nine point nine percent of investors. So don't second guess yourself
back yourself and go hard and really have conviction in what you've chosen of course
you can and discuss this with, myself on the video chats that we have but don't be
hesitant if you have applied the system correctly and I’ve spent a lot of time trying to
explain it down to the detail than you will be successful. Now the last thing that I’ll
explain his we've been through this this this and this, we haven't gone through the
Australian growth factors yet and the reason is that they don't actually help us short list
our suburbs because the Australian growth factors by definition of impact the entire
nation not just particular areas but really to round out your knowledge of property
markets I want you to understand how these work on so let's go through these fairly
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 41
Property Investment Accelerator
quickly. So, in the short term government incentives, so stimulus packages from the
government, first homeowners grant construction rebates all of this injection of money
into the economy means that there's more cash and the economy and that means that
the house prices have the tail wins behind them more money that people have even if
it's just from the government the more they'll spend. Availability of credit number two.
So, what this means is how easily are banks’ lending to you and I. In two thousand and
seventeen when Melbourne and Sydney started to reduce and price it wasn't because
of underlying demand and supply factors it was because of artificial imposition by the
banks to say we aren't allowed to or we weren't providing investor lending like we did
over the last four years and that's what caused a correction in the market. On average
so that's what availability of credit means clearly the official cash rate is something that's
very important so aware at the lowest at the time of recording lowest interest rates ever
in in Australia over the next three to four years they probably weren't increase until we
reach full employment of four percent. but in the long term they will increase and that
generally has a negative impact on property markets but that's not going to happen in
the short term. Consumer confidence so how consumers feel how willing and able that
they are to spend that's a quantitative, factor that comes into comes into play when
trying to understand full picture of property markets. Gross domestic product you know
generally when GDP or the economy you could say is growing by two percent per
annum, that means that house prices will also grow more than two percent per annum
when the GDP growth at less than two percent the house prices also have a have are
impacted on average of course there is always suburbs that out the form and
underperformed we've been through that but I’m talking averages here now. So that's
really important and the number six level of employment so than the role absolute
number of people in jobs that has an impact on the economy so unemployment rate
could increase but if the absolute number of people employed also increases which is
possible if there's migration into Australia, then property markets will be solid. Right so
even if unemployment rate as a percentage increase if the absolute million number of
employed people also increases house prices are fine. So, I want to share these things
with you just to give you an indication of what are the real data factors to consider when
making decisions and when thinking about aggregate property markets and this allows
you to block out the noise and basically ignore the media that post sensationalist
articles and often get property investors a little bit concerned. We just want to be
following this data. Okay, and you can see here over the page everything is quite
important consumer confidence looks relatively less so, I won't go through it and too
much detail you can see it in front of you, and the government incentives you can
understand in our like stamp duty rebates from state government websites, availability
of credit you can ask the mortgage broker that I’ve provided you in week one and they
will have a very good understanding of this. The official cash rate so you cannot
understand the current official cash rate through this website and future expectations
through this website so let's just go there right now. So, this gives you the current the
cash rate you can see how, over the years it's come down and right now set point two
five percent said this is the website if you click this and the future expectations and this
helps when making decisions or whether to fix your home loan or keep it variable which
we talked about in week one that's on this website. So, you can see here the says that
what are the odds based on the futures markets based on money markets, what
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 42
Property Investment Accelerator
people's expectations are what are the odds day on day that the next interest rate will
have no change or whether it will decrease. In this case to zero because it's point two
five at the moment so what this is saying is that most people are expecting interest rates
to actually reduce down to zero at the next decision point, which is the RBA makes a
decision on the first Tuesday of every month so this is saying that were expecting the
next interest rate move to not be no change but to be actually be a reduction. So that
helps you make decisions of whether to fix your rate or whether to keep it variable.
210 Minutes to 225 Minutes
So that's that. Consumer confidence is through this website here Roy Morgan's when
you click on it comes up like this so gives you ANZ, Roya Morgan Australian consumer
confidence monthly rating they started recording this in nineteen seventy three all the
way to now. So, every year it gives you the month on month figures and then the
average. So, if I scroll right down to two thousand and twenty you can see that two
thousand and twenty started off well and then when corona virus happened in march it
took a dip a further dip then January February march April may and may it started to
come up in June it came up further but then in July it dropped off again. So, this keep
gives you a good understanding of consumer confidence you know how confident
people are in general about spending about investing about you know really living lives
as normal as opposed to being apprehensive in a little bit fearful about the future and
that obviously effects property markets as well on average. Of course, we're talking
averages here which doesn't help us in suburbs election but does help us understand
the overall property markets. So that's that one, gross domestic product so you want to
check the historical trend on GDP, and you can also estimate future GDP by reading the
reserve bank minutes which they release at a meeting on the first Tuesday of every
month so the websites there are this one right here so on this one you can, this one you
want to go to GDP so this is saying that from let me just interpret this correctly.
December eighteen to march nineteen GDP grew by point five percent march nineteen
two June nineteen it grew by so it's quarter on quarter point six percent June nineteen
two September nineteen six percent the next one five percent and then because of
corona virus December nineteen to much twenty it was negative and then you know we
don't have the data for the most recent quarter yet but this allows you to understand
how GDP is performing, and like I said before if GDP is growing by more than two
percent that's a really strong support for the property market. In this case it's not quite or
the last the first four quarters were so if you add point five point six point six point five
together that does exceed two percent over those twelve months but starting this year
this calendar year, it's not going to so on average property markets will struggle
according to the this, but of course there will always be suburbs that do really really well
and that's what we're looking for. And then you're also looking at minutes, so if you can
also go on the monetary policy and look at that sorry I’m switching around a lot and then
level of employment, so most important measures employed people not unemployment
rate so that this website here so the employed people so in may twenty there were
twelve million employed people in Australia in June twenty there were and there were
twelve million twelve point three million, then may twenty two June twenty number
increased by two hundred and ten thousand but the June two thousand and nineteen
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prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 43
Property Investment Accelerator
and June twenty number the year on year change you can see there was four percent
less people employed in Australia then there were at the same time last year so this is
the most important number right here, and so you can see that that really has a drag
effect on property markets and he is a is a cool chart that shows that as well so can see
of the two thousand and fifteen to nineteen the employed people were just increasing
and other virtues. So don't be pessimistic oh don't be fearful about these numbers, you
know regardless of what the property market is doing in aggregate or on average there
will always be markets within market suburbs and pockets with in suburbs that will do
exceptionally well. Okay so this just it allows us to understand on average on aggregate
how the property market is fairing and really allows us to look at the to ourselves rather
than rely on media articles. You should never rely on opinion or media articles when it
comes to property investing, and then lastly but not least Australia growth factors in the
long term. So what matters most from the long term is political stability I said that before
we're not going to become a dictator state we're not going to become a communist state
a military coup things like that and that's why from countries all over the world people
will continue to migrate into Australia of the long term people will continue to bring up
their money in to Australia because it's stable and that provides a really really good
optimism for property markets on average on aggregate over the long term but like I
said these top two boxes don't really help us select a suburb of they do help us round
off our knowledge of the property markets. And the source for that is looked just general
various google research and pretty well known stuff, so that's the end of this week, so
what I want you to do right now like I said at the start of the course this is not a get rich
quick scheme. You will not make money unless you actually apply it but at the same
time don't be intimidated don't be daunted by what you need to do it's taken me you
know hours and hours to explain to you how to do it and what to do right down to the
detail and this has accumulated knowledge that I built for myself initially and then for
clients in over years and years and years and years so you're really tasting the ripe fruit
of a lot of hard work it has taken time for me to explain to you and of course you can ask
questions and bounce ideas on the video calls. But really the implementation is not that
difficult okay once you start getting into it, it should not take you more than three four
maybe five hours to actually implement this system and actually find a high growth
suburb that will give you passive income from day one and allow you to achieve
ultimately by compounding portfolio a one hundred thousand to two hundred thousand
dollar passive income over the long term. Okay so you can do this and I’m here to help
you as well so just follow the process and trust the system don't be distracted by other
things that you hear I’ve really concentrated and condensed everything that's important
into this week's training into this system it's proven it works reliably and predictably. You
want growth in the short term not just the long term we want both growth in the short
and the long term and this is the system that that helps you achieve that okay so, use
these slides the system it's and the download section use the work book it's and the
download section go through it systematically to reiterate the DSR tool allows you to
basically filter your top fifteen suburbs and it's those fifteen that you enter into this
workbook and then from those fifteen you go on to factors ten to fifteen in the short term
suburb layer factors and once you do that you're fifteen suburb should narrow down
maybe to ten or thereabouts and then you apply the short term us are you apply the
long term suburbs of factors the short term city factors, the long term city factors so that
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
Pg. 44
Property Investment Accelerator
should get your list down below ten to five and ultimately you want to land on about two
to three suburbs, maybe two suburbs. Landing on one suburb is not a good idea and I’ll
explain to the reasons in week three you want to have some flexibility just in case
there's no stock available in in the suburb you've selected. So, you want to have at least
two suburbs and the mix and yeah that's not that much hard work then from there or
here on in. So, two to three suburbs keep that many and your shortlist but this is exactly
how to do it, the right down to the detail than right down to the exact sort of
methodology and process. So good luck. You'll do a great job but please don't go on to
the next week, until you've actually done this because you'll just be absorbing more and
more knowledge, more more information without actually applying it and it may become
overwhelming. So, this course is intended to be practical not theoretical, so as you do
this go ahead and apply what you've learned, and then we just take one step after
another. Like confucius said the longest journey starts with the first step and then we
take the second step and the third step okay so overall I don't expect you to be doing
more than three to four hours of work every week , so that's how much you can expect
to satisfy, and really this week is where the majority of the hard work happens it gets
easier from here. Alright guys, that is week number two how to select your best growth
suburb. I’ll see you in week three very shortly.
________________________________________________________________________________________________________________________________________________________________________
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Terms & Conditions: © Consulting By PK - All rights reserved. Do not share, copy, reproduce or sell any part of this document unless you have written permission from Consulting By PK. All infringements will be
prosecuted. If you are the personal owner of the Consulting By PK End User License then you may use it for your own use but not for any other purpose.
Disclaimer: The opinions expressed in all material published by Consulting By PK are not to be construed as financial or investment advice nor should be relied upon for any investment activities. Consulting By
PK strongly recommends that you perform your own independent research and/or seek your own legal advice before making any financial decisions. Contents of this message are of general nature only and
should not be relied upon solely when making an investment decision. Consulting By PK nor any of its directors, associates, staff, or associated companies bear any liability from any actions derived from in this
document. One should always seek third party investment information from relevant parties such as legal, finance, and accountancy enquiries. For the avoidance of doubt, any information provided by Consulting
By PK is general only and has been prepared without taking account of your personal objectives, financial situation or needs. Any information by Consulting By PK is not intended to imply any recommendation
about any particular financial product or class of financial products and should not reasonably be regarded as being intended to have such an influence. Before acting on any such general information, you should
consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You may wish to consult a licensed financial advisor.
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