Property Isn’t High-Performance

2 Red Flags That Tell You a Property Isn’t High-Performance

Maybe you’ve heard us talk about the value of investing in high-performance properties

You have your definition of the Holy Trinity of Real Estate Investing down pat.

  • High Yield? Check.
  • High Growth? Got it.
  • Value Add? Lookin’ good!

So, you have all the signs that can put you on the right track to investment success. But what should you stay away from?

Take a look at 2 signs that a property isn’t high-performance:

Increase in Vacancy Rates

More growth means more people.

And that’s ultimately better for property owners, right?

Yes. And no.

Growing vacancy rates can throw the balance of supply...

...and demand off balance in an area.

This means that there’s a potential that an area or suburb has too many housing options.

Find out if this is a potential worry for you by checking out the local council for the area you’re interested in.

You may also want to find out how many new projects are in the pipeline for the area.

Poor Economic Growth

Neighbourhood decline may not be evident when you first do your research.

But there are signs that economic turmoil could be an issue in the future.

Take a look at the source of industry for the area.

Look for the number of industries...

...and major employers in the area.

New industries and major companies...

...can spark economic growth.

But if there is a lack of economic diversity?

Or an industry goes under?

That could mean that people move away and leave you without tenants.

Also, check out local infrastructure in the area.

You want to see new projects in the pipeline.

That means the state expects growth.

However, if you don’t see projects that maintain or build new infrastructure...

...you may want to pass on the property.

So, it all boils down to research.

You may understand the 3 principles of the Holy Trinity.

But you also need to do the research at both the macro and micro levels.

Proper research not only helps you avoid red flag properties, but it can also help you narrow down your investment options.

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And remember, stay awesome, and keep dreaming bigger.

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