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5 (often overlooked) investment considerations for PMs and BDMs

By Tim Neary
14 January 2019 | 10 minute read
new year 2019

Astute PMs and BDMs know that the start of the year is the time when most investors make plans to achieve more with their portfolios. Here are five intuitive, yet sometimes overlooked, things you could suggest they consider covering off on.

1. Clean up  

Director at valuation and advisory firm Herron Todd White Investors, Angeline Mann said that investors set to gain the most in 2019 will have healthy balance sheets.

“The tough finance environment that plagued borrowers in the second half of 2018 looks set to continue over the medium term,” she said, particularly with the banking royal commission findings due in February this year.

She said that now is the time for investors to get their financial affairs in order.

She said that while conditions are tough for borrowers, banks will compete for those with the right numbers.

“Banks are eager to lend to good borrowers,” Ms Mann said.

“[They should be] among this desirable subset and take advantage by shopping around [their] business.”

2. Dot i’s, cross t’s

Ms Mann said smart landlords study their existing lease details well before they’re due to be renewed.

“Don’t wait to the last minute — know when your leases are due for renewal and understand the process. Being ill-prepared creates pressure and will have you making bad decisions.”

Ms Mann said that fickle vacancy rates recently means locking in good tenants now is a smart play.

“In some cases, avoiding a rent rise — or even lowering the rent come renewal time — means you can keep a good tenant longer and reduce your vacancy.”

Ms Mann also said that it’s a good idea to have leases fall due during peak rental periods.

“While in most instances rental demand is highest in January or July, it can vary by location, so you [should] do some research to determine when tenant demand is peaking in your patch.”

3. Read

Being well-informed about markets helps investors spot opportunities quickly, Ms Mann said.

“There’s no substitute for studying actual, completed sales or rentals in a suburb across a three-to-six-month period in order to paint a picture of a market’s direction.

“If you have selected a location, start putting together a file of properties that have sold and/or leased in their price point straight away.

“This will educate you on what the market is doing and provide accurate evidence as to what you should pay for an investment property so you can secure it quickly.

“Keeping a record of transactions is invaluable, and a file compiled over a minimum three to six months is absolutely essential.”

4. Reach 

Despite most transactions occurring in the capital cities, Ms Mann said smart investors are becoming borderless.

“Everyone knows Sydney and Melbourne are coming off half a decade of huge value gains, and their outlook is for further price softening.

“While there will still be opportunities in these capitals to profit, savvy investors are getting outside their comfort zones and looking further afield.”

5. Ponder

Ms Mann said that January is “definitely” a time for investors to think about how their investment strategy is playing out.

She said clever investors will be revisiting their strategy in January — particularly for those who’ve bought in Sydney or Melbourne.

“You may need to delay or amend your plans if markets are softening — you should be flexible so you can achieve your goals.”

Do you have an industry update?