The Ultimate Guide To Renovation Course - Module 2: The Suburb Selector Software Part 1

Welcome back. Now, this is the exciting suburb selector software. This is where each suburb competes against each other for your attention so that you can start getting more information on the suburbs that you're going to take further for your analysis. So let's start with the software and start putting in our criteria. So I'm going to choose here, Melbourne. Now the purchase price, you can remember we looked at the median criteria or the median price for Melbourne 743 and we added 10%. So I'm going to write in here 825,000, which is that number that we were looking at. Now, once again, this is where you put in your purchase price. So, so what you can afford and allow up to a 20% difference, but you don't have to put that in here because you can actually go into this next level and say how far below your purchase price you'll consider. So let's just put 90% in here for now and how far above. So this is where you can put in your purchase price and put in 10% above or 20% above. So I'm just going to leave that at zero. Now, once again, my criteria is 20K from the CBD. So I'm going to put 20 in here and I'm going to hit next and go to the next step. So as you can see, all of the suburbs come up here that actually meet that criteria, which is really exciting. So if you want to actually, if you don't know where a particular suburb is, you can actually click here on the map as well and it will show you where that is. So really handy software. And here we've got the kilometers from the CBD and the median house price. So this is where it gets exciting. This is where we collate all of the suburbs that we have actually got through all of the reports in our dot map. So we're going to go through, start with our dot map, exercise in those suburbs and then add all the rest of them in as well. So let's get on and do that. Okay, so we have Pasco Vale. Let's get down to Pascovale. We'll click on it. We've got Hetherton. So some of the suburbs that are on your list here may not actually come up. So Essendon, North Sea, Essendon's not. So it must be out of our price range, which we know from looking at the report previously. We've got Point Cook. Now let's have a look at Point Cook. No, must be out of 20 kilometres south Melbourne. It's not there either. We know it's over 825,000. Moonee Ponds. So this is where our criteria starts getting put into place. So Moonee Ponds is over a million dollars. So it's out. St Kilda. Let's bet it's out as well. St Kilda doesn't appear. Collingwood. Nope. It doesn't appear either. Templestowe. So remember we've got a 20 case in CBD and we also have the price of 825,000. So we're filtering really quickly here. We got Faulkner, so Faulkner's here. We have reservoir. Click it. So this is going to take us through to the next level and of data and analysis. We have Heidelberg west. We have Malvern East. Now you might remember that some of these suburbs in subsequent reports we got rid of because they didn't have the right sales data. But in the dot map we didn't have that criteria. We were just looking at that 2% incremental differential between the capital growth. So some of these suburbs might have subsequently been knocked down. So Malvern east is not there. Clarinda is there. Clayton south is not there. Clayton's there. Sandringham. Not there. And Blackrock. Very expensive. Should not be there and it's not. Okay, so let's have a look at the 1% incrementals that we wrote down here for our dot maps. We have our Tona Meadows. We have Port Melbourne which will be out because of its price. So it's not here. We have Donvale and Donvale's out as well, possibly because of its distance. So now let's move on to those suburbs that we chose from the predictions report. So we have Mickleham, that doesn't appear. We have Foots Grey, that does appear. And we have Coburg. Okay, so let's move on to our next report. So now what I'm doing is I'm looking at those suburbs that came out from The Residex Top 100 report. Coburg. Once again, interesting. It's come up twice. Just might make a note there. I'm interested when suburbs come up on multiple lists. Carolina Springs. It's not there. It's probably out 20 kilometres. Tarneet. So let's have a look at Tarneet. I know that it's out of 20 kilometres so it shouldn't appear. So it's not there. Newport. Pretty sure it's here. Here we go. Newport. We've got Maramynong. It's on our list. We've got Greenvale, that doesn't appear. We've got Hillside, that is not there. And we've got Taylor's Hill. That doesn't appear either. Now you might recall we had nothing from the Ripehouse report, but when we went to the terry Rider Top 5 Melbourne Hotspot Report, we did have some suburbs. So let's go up here and have a look at those. So we had Braybrooke. Yep, there it is. It does appear we've got Deer Park. That appears we've got Sunshine. Sunshine doesn't appear, but Sunshine north did, and Sunshine west. And we have Greensboro and we have McLeod and finally Montmorency. So there you go. We have our list of suburbs that we are now going to take through to the next step. So let's just do that onto the next step. Calculations going on the background and up comes all the information that we want to know about these suburbs. Now this is a really interesting exercise in a non visual dot map. So I just want to draw your attention to it and I'm going to look at the first suburb in relation to the other suburbs in the area. So what you're going to see when you go on to step three is we've actually pulled up all this information about the suburb and the key criteria that we want to start filtering our suburbs through. But in addition to that, what we've done is we've actually located the suburbs in the vicinity. So you kind of have information that we would normally see in the dot map, but we're actually getting it reinforced here. Now that may mean that there's other suburbs in this area that haven't come up on all of these lists that you may want to take through to have a look at for more analysis. Now we're not going to do this here because we have so many suburbs that we have here. But I want you to be able to understand what we're looking at. So let's have a look at this first. First suburb here we've got our Toner Meadows. So we've got our toner meadows 17.6 ks in the CBD with a price point of 440,000. Now what we know about information or ripple effect and the dot map is that often what we find is that ripple effect out of the cbd. So price growth goes up out of the cbd. So the cheaper prices are on the outside and that's how we anticipate potentially that capital growth, that hotspot. So as we see the suburbs that we're looking at here in this document, we can actually see those suburbs that are closer to the cbd. We would expect them to actually have a higher price point and an overall 10 year growth that's higher as well. So let's just have a look at that. So we've kind of got a virtual dot map happening here. So our turn of Meadows is 17.6 kilometers from CBD and the price point is $4.40 and the 10 year growth is 6%. We have here our toner, that's closer at 13.4. And as you can see as we expected the price point 660, so it's a lot higher and we have the 10 year growth here at 7.1%. So that just validates the ripple effect. So this is really good information. Now the other thing that we want to have a look at is, you know, when we're talking about hotspots, we don't necessarily want to be the first to market. We do want some proof that over the longevity of the history of this suburb that there has been some growth. So this is why we actually, in this capital growth area of analysis, we actually look at when the growth has been so over the last 10 years, five years, three years, one year or even the last quarter. So we can see here Altona Meadows in the last quarter has actually had more growth than the surrounding suburbs. So it indicates to me that some people are starting to look at this area. In the last year it's had some pretty good growth as well. But when we start looking at it in comparison to maybe, you know, the last three to four, three to five years, we can see that it potentially has less growth than others, Laverton and Altona in the area. So we want to have some confidence that there is a demand for property in this area. We don't want to be the first to market, but we also want to be able to identify the opportunity that arises with it. And this is what this information allows us to do. So what we're going to do now is actually apply a new criteria to the assessment that we're going to do on these suburbs. Now we've already got some criteria. We've got that price point. We had the 825,000, we had the yield of 3.17%. We had the number of sales of 10 per month or 120 per year. Now I'm going to add on another criteria. Now this is because I'm looking with the context of a buy hold strategy. So I want to make sure that when I end up with a property that's beautifully renovated, for instance, that I'm actually going to have a demand for that property. And what's the demand for the property, it's having renters there ready to actually rent the property. Now, you can come up with your own criteria regarding this, but for me, I want to have over 30% of the population in that area wanting to rent a property and I also want to have less than 70% of renters as well, because I don't just want to have a whole new development full of renters, I want to have some owner occupiers there because those more established people in the area who are actually investing in the area have the pride in their property, actually help create that capital growth and that longevity for that suburb. So. So I actually look at between 30% and 70% of renters in the area. So once again we have a whole list of suburbs. And now I have the opportunity to run through really quickly. And this time, because I've already got all those other criteria in play, this time, what I'm going to do is I'm going to have a look at any area that has over 30% of renters. I'm going to apply that over 120 purchases happening a year, and then I'm going to apply that yield of over 3.17% and then we're going to come up with our real short list of suburbs. So let's have a look at that. So what I'm going to do is I'm just going to go over. You can see we've got a lot of information here. We have the capital growth information, we've got the rental data, we've got the suburb data. The suburb analysis is interesting. So this is where my percentage of renters come up. This is the percentage of public housing in the area and the crime rate as well. So these might be criterias or filters that you actually apply to a suburb that you're interested in investing in. For me right now, I've got three criteria that I'm assessing these suburbs. They're in bold. The ones that I've chosen from all of my lists, and that is I'm looking at over 30% renters and less than 70%. I'm looking here at the sales volume per year. I want that to be over 120. And I'm looking here at the rental yield because I want that to be over 3.17. So let's have a look. So Altona Meadows was our first percentage of renters, 25.1%, not on my list. We've got the next one, 45.9. This is looking good. We've got 133 sales and 3.3. So this goes on my list. Now, you may or may not be concerned about this very high crime rate, something to investigate, and there might be certain streets in the area that you want to stay away from, but we're going to get into that detail a lot later when we get into the real detail on this suburb. For now, we're just getting our short list. Okay, let's go down here. We've got 22% renters, 30.5. Oh, just scrapes in. 323 sales. And we have 3.5 yield. So this one goes in as well. 28.7, 24%, 53.6%. That's a lot of renters. 191 sales, 3.3 yields. So we're going to put that in. We got 16.6, 23.9, 55.9% renters, 92 sales. So it's out. 17.8%. Renters, 20.2, 30.9. Oh, scrapes in 177 sales in a year. That's okay. And 3.7. So that is on my list. Then we move down here. 17.7. It's out. 27.1%, 28.3%. Once again, you can be lenient with your criteria. I'm not. 32.4%. That's good. Wow. Lots of sales. 736, 3.4 in yield. So they're in. 23%. It's out. 22.6%. It's out. So now we're ready to actually take these that we've selected across to the next step. So in the next video we're going to have a look at step four.