Last time we introduced Luke, one of our Property Zest clients who agreed to have his latest investing journey documented. With Luke eyeing on several locations for this purchase, we clearly have to narrow down the list by identifying his buying criteria.
We’ve highlighted in the past how important establishing one’s buying criteria is as this sets the guidelines in your investing process. Having a clear understanding of your buying criteria ensures that all the efforts you’re doing in the process are all geared towards achieving those criteria.
Criteria
As we mentioned in the first part of this series, Luke is buying this property in a self managed superannuation fund. This purchase needs to provide long term growth by being cashflow neutral or even positive.
Budget. Luke has set the budget up to $350k.
Location. Luke was eyeing the suburbs of Brisbane, Moreton Bay/Redcliffe area, Toowoomba, Gladstone, Townsville, Mackay, Roma, Emerald and Rockhampton; with growth drivers such as shops, transport, and population growth.
Property. Since Luke would like to have something that would require less maintenance, he has decided on picking a family type property that’s new to near new (up to 5 years old) with 3 bedrooms or more. He’s also open to the idea of depreciation benefits (note though the lower taxation rates in a SMSF). Again, he wanted something that’s neutral to positive cashflow (Luke was buying at 70% in his SMSF).
With those criteria, we came up with a Project Brief that would help us in our search. This project brief still needs to be narrowed down since it contains a wide range of target locations, which is what we did and we’ll share the process with you in the next installment of this series.