Should you buy property in Suburbs or Cities?

Brett Alegre-Wood
December 2, 2018

Video Transcription: 

So, hey guys. Should you buy in the suburbs or cities? You know, so it's a really good question actually because I think one of the key things here, and the answer to this is quite simply, it's about fundamentals, okay? In fact, all investments should start with fundamentals. I mean, I think far too often we start with what's called opportunity, all right, or the deal, okay? The salesmanship. You know, there are so many times when we go after when we have a salesperson who pitches us the best deal on property.

And actually, you need to filter that out. You need to get rid of all that BS, okay, and hype. And what you really need to focus on is actually the fundamentals, so the shops, schools, transports, major employers, major investments. And I know you'll get bored of me saying that, but hopefully, if it drums into you and you can build a framework for investment around fundamentals, you will be a much, much better investor a lot sooner. You will have a lot less issues, okay?

Coming back to the question, suburbs or cities? I mean, look, for me there is one thing about cities, are you got the best fundamentals in the cities. Normally, it's the cities, the fundamentals then ripple out from there. Okay, so the question then becomes, one, if that's got the best fundamentals, why would you go anywhere else? Okay, and to a large degree, there's actually a good case these days to say, "You know what? That is exactly right. Why go anywhere else but the cities?" Now, I'm not talking about living, because personally, do I like living in the city? Yeah, it's okay, but you know what? I prefer a bit of space and that is just me. I have always preferred a bit more space. So where would I buy my home? I would probably get it in the suburbs, get a bit of acreage, get a bit of space to run around in, you know. But then I might have my city landing pad as well. So, you know, I have got that functionality.

But realistically, if we come back to investment, I think your cities have the best fundamentals. They ripple out along that. So then it becomes, which is the best fundamentals for the best price? Okay, because one of the things you got to look at too, is actually, is if you got the price, you know, you're getting a cheap price for the best fundamentals, fantastic. But the other side of it is, that if you look at the market and the city that you are looking to invest in has grown considerably, you may find that right now, you're gonna buy it at the top of the market, and there may be some drop off, or they may be a limited growth for a period. Over a long period of time, it's not really going to worry you. But what you'll find is that if you invest in an area that has good fundamentals and you make sure that is the basis, then you add things like where is the cycle in the market? So is the top of the market? is it the bottom of the market? Are prices sitting flat? Are they about to take off? You start adding those things into investment after, okay?

So you start off with the fundamentals. Once it ticks that box, then you can look to the next step which is about what the market is doing and that sort thing, because that really will give you a better idea or a more certain making money and finding the best areas. But look, for me, cities are attracting and they are the easiest to attract the investment and that investment is what changes the fundamentals, and that changing fundamentals is what gets you the easiest capital growth on your property. So you know, as an investor, fantastic, plus rental yields and things like that. But you have also got to look at things like, in cities, there may be thousands of flats going up and if there are thousands of flats going up, is that going to affect your rental yield?

So all these aspects you have to put... And what I generally do is I work in a methodical framework, and obviously if you want to know what that is, then just speak to my team, jump on and explore, watch more of my videos and you will start to get a real sense for, you know, I'm very much a numbers investor. I am very much... I stick to a framework and I use that framework the same every single time. So you will find that all my due diligence documents are the same every single time. Why? Because it's a repeatable pattern. And that, you'll find, successful investors have a repeatable framework, a repeatable pattern. So that should give you a bit of an idea. It's not about whether it's cities or suburbs. It's about a whole host of other things, but make sure you get those fundamentals in. All right guys, have a great day, live with passion, and remember, subscribe and comment.


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