The 5 Best Property Fundamentals

Are you looking to invest in property but unsure where to start? Look no further! In this six-part series, we'll be covering the fundamentals of property investment. In this first video, we'll be discussing the top five key property fundamentals that are crucial to consider when looking for your next investment. From major investments to good schools, we'll be covering it all. And don't worry, we've got you covered with a handy checklist. Join us as we dive deep into the world of property investment and help you make informed decisions for your future. Let's get started!

Video Transcription About The 5 Best Property Fundamentals

I thought I'd do a six part series on fundamentals and what are  the property fundamentals. Bottom line with property fundamentals is in this video, I'll just I'll list them for you. So you get them, basically shops schools transformed into major employers major investment. Those five things are the key to fundamentals. Now, shops, schools transform these major employers major investment, if you put them backwards that way, if they're not, then what I read them, that is how you order fundamentals, in other words, major investment is going to have the biggest impact on an area. 

Shops, schools, which are the first ones out there not such a big, you know, if you've got a couple of shops around the thing doesn't make a huge difference, that basically that major investment yet employments in the area, they make a massive, massive difference. So and then obviously transport links, you know, good schools, things like that is also then in there. So that's sort of really what it is shops, schools, transport is major, it was major investment. So when you're looking for a property, look for those things. And if you need to make a checklist of each of those five things and detail what that actually means it will go into the other videos in other parts as to what you need to do to actually let the reasons that that accounts and what is that? If you're not sure, jump on my website, and you can download the checklist. 

I've got checklists for all sorts of things. I use checklists, I literally, if I'm doing inspections, I take a I'm an old school guy. So I have a wooden board or wouldn't have what I call folder thing, and I take off bits and pieces, make notes. That's just how I've always done it. And I'm sure one day I'll put it online. In fact, we have got an online we've got an Excel spreadsheet as well. But I don't really use that because I find it's just too constricting when I'm doing the inspection, so fundamentals are by far the most important determinant and most important thing to determine value in a property. So make sure you consider this property fundamentals and look after them.

Video Transcription About Property Fundamentals: Shops and Schools

Let's have a look at shops and schools. These are the two least important things out of the property fundamentals that we have. I'll deal with them together and do them in one video, get them out of the way. Look shops, we're talking about small shops, you just walk down and get milk and bread and things like that. And then we're talking about big shops where you can go and do proper shops, you know, you might talk about main streets, or the high streets, things like that, and how far they are away. So that's the sort of shop thing the school things the schools comes down to. It comes down to obviously, you know, preschool, secondary, blah, blah, blah, universities all the way up and all the way through. And I think that's really important, too, is that this is about education. Okay, substance school. Sounds good. But what you're talking about is education. And because education is so important, I was chatting today at lunch with Rochelle RMD, in Asia, and I'm, you know, saying how the two biggest expenses, the biggest expenses, living Singapore, a housing and education, because of course, private school is bloody expensive. And parents are paid to pay for that. It's interesting, because we've now changed the homeschooling.

So it doesn't matter where we are, which has actually been a fantastic thing. It's allowing us to travel for two years without too much of a problem having to have the kids in school. But anyway, that's off the map. But the problem the key here with shops and schools is, the better the shops, the better the schools, the better the proximity to the property you're looking at, what's the area, then obviously, that will generally raise the value increase the value? So that's something to consider. We just literally have a tick box about, you know, where are the universities where the schools, and guess what guys, you know, we're now in the year as of AI, or the area of AI, so we can type into chat GPT or others, and pretty much find out this information almost instantaneously. And ask for it. I did a thing yesterday where I basically said write me a 300 word essay about the education in this area, boom, it spat it out, you know, so there's no excuse for not doing this for taking a little bit of time and actually doing that sort of research now. Because I think it's really, really important. And, you know, you've got the tools there, these tools are free now. I mean, it's just knowledge is is free, it's, you know, you don't have to pay for it anymore, which is absolutely fantastic thing. You know, it's so easy. Sure, the interpretation of knowledge is different. That's the first few property fundamentals. 

Video Transcription About Property Fundamentals: Transport Links

The next one is transport links. This is in the middle of the shops and schools, and the major employment, major investment. transport links, we're talking about buses, we're talking about trains, we're talking about, you know, Ubers, and things like that. All the bits and pieces. Depending on where you are, you know, transport is about how do we get around? How easy is it to get around, I know, where I live for where I grew up. in Ipswich, it was about an hour away from Brisbane, by train, it was about 35 minutes by car. The problem with train is it a run once an hour, and it was really restricted where it was go. It wasn't very easy. So you'd almost exclude the train out of it. Whereas you come to say Singapore, where there's MIT's all over the place, or say London, where it's really easy, we'll actually trains are a big part of those property fundamentals. So you've got to factor that in if you're near an MRT, station or tube station, obviously, that massively will add a system to assist the fundamentals. The property fundamentals is what causes things to go up in value. Because it's desirable, because human nature, we want scarcity. And so that's one of the property  fundamentals.

So transport links, is the next thing. And I think really, this is it is really important to look at, you know, but it's, it's also airports as well, because, you know, you might have an airport close by I know, where we got place on the Gold Coast. You know, 15 minutes from Gold Coast Airport. It's fantastic. It's wonderful. You know, in Singapore, we lived on the East Coast, because we're only seven minutes like math, no, 11 minutes, I can make it to the airport, because I fly quite a bit. That was awesome. That was part of the property fundamentals. The reality is, is that you know, when you factor in the other stuff, even though we were living minutes from the airport, the value property, there weren't as good as I say, core central region, in Orchard Road where I am right now. You know, why? Because the other property fundamentals that come into play that we're going to talk about.

Video Transcription About Property Fundamentals: Major Employment

Next one is major employment or employment or major employees, basically, it's about jobs. Jobs are property fundamentals, we want to be close to their jobs. One of my rules when I lived in London was basically I want to be within five minutes walk of where I had the office. Because by doing that, the quality of life was so much better. But obviously, I had to pay a premium in buying places in a place there, I had to, you know, when I was renting there, it was paying a premium, but I wanted that premium because of the ease of thing. And that's the same with the people or the areas you can look at, you want to try and find the areas that have the closer jobs. Whether that be close to jobs for you, or close to jobs for your tenant, doesn't matter. The more jobs you've got, we had in the global financial crisis, one of the areas where we had a development, they had a particularly large, I can't remember what it was, but it went bust. And of course, all of a sudden, in that area, the property fundamentals changed dramatically, because they employed, I think, was about two or 3000 people in the town. They all got made redundant. And, you know, that ruin the rentals in the town. So it's not just about the, the level of them, but it's about the variety. You know, you got to somewhere, like, where I'm thinking, you know, what, I can't remember the bloody name of that. Company anyway. You go somewhere that has a high tech, you know, your nuclear submarines or, you know, aircraft engines that have been built in up in the north of England, and where the average wage is higher than London, you know, why? Because you've got so many technical people there, you know, so you've got to look at these things, the employment, but not just the number of jobs, the variety of jobs, but also how much those job pay. Are they highly technical, you know, you got to somewhere like I mean, as much as I don't really invest there anymore, because they lost the Westfield Croydon. Croydon was looking fantastic. It has heaps of head offices, you know, European head offices, things like that. You can go to Bristol, it has heaps of financial services there.

So there's a lot of places that you may not realize what they have there. That's really important to look and get down and dirty with those details about what are the jobs that are available in that area, and really knock that out before you buy? Because remember, property fundamentals are really hard to change. And this is something when we talk about property fundamentals, you can't influence property fundamentals, okay? The most you can do to influence value is renovating the property, perhaps adding rooms, things like that. The word we're talking about now is stuff that's outside of your control and stuff that takes a long time to actually change. So that's where you got to do the research upfront, and make sure you do it. It's so easy to forget about it so easily it salespeople to sell you on all this BS and hide. Next one we'll talk about investment, you know, make sure things are funded. You know, if this is Westfield, and I was going to come to Croydon, and then they cut it, you know, it was as far as anyone's concerned, it was coming and people bought it based on that. Luckily, there was other things going on because we didn't rely on that one thing, but it's really, really important jobs are part  of property  fundamentals. People don't want to travel long distances, although in the UK, they are willing to travel and they do travel.

Video Transcription About Property Fundamentals: Major Investment

So this is by far the most important property fundamentals. And I think the key here this is, you know, this is my specialty, you know, and in particular, regeneration is one of the things that I'm sort of been really for the last 20 years is what I've been doing, because I focus on new building, because I focus on Off Plan, a lot of times we're going after areas that are undergoing massive fundamental change, you know, this can be 3000 apartments, this can be, you know, major new industrial areas, or commercial areas being added to, it can be old buildings being ripped down and rebuilt. So this is a sort of high level stuff. That's the sort of stuff that I go to, when we talk about major investment, but it doesn't have to be that, okay. And I'm not saying I'm opposing, you have to do that, in order to get this. Alright, you can do second and property, no problems whatsoever. It applies with any applies to the HMO students, whatever these property fundamentals are across the world. They aren't they don't change. 

Wherever you are, whether you're in Canada, whether you're in Singapore, whether you're in Hong Kong, whether you're in Middle East, London, whatever, these fundamentals, these five property fundamentals absolutely go there. And so obviously, the bigger the change in are, the bigger the bigger the investment, the bigger the change in property fundamentals, the bigger the change in property fundamentals, the likelihood is that the price is going to go up. And we see this regularly, not just the price, but also the yields because the rent is going up. And I think that's one of the key things here. If you can find these pockets, these areas that are undergoing massive change in property fundamentals, you can almost build in that profit, then the next trick is to get in early enough. That is a trick, okay? Because really, you don't want to get in too early, where it's just for her and you know, gone, but you want to get in early enough. So you get it well, the price is still there, the property fundamentals aren't there, and then sit around and wait and ride that, you know that wave up. You can do buy new book with that, or you can buy secondhand doesn't matter.  

Fundamentals and major investment in area will change the property fundamentals. One of the key things I talked about, you know, we talked about never, never sell, it's one of the principles, the cornerstones of my portfolio strategy, never, never sell. That doesn't mean that you never, never sell because there's an asterix and that Asterix is never, never sell while there is fundamentals in that area. But what happens in fundamentals is fundamentals, you know, get built up, and then they sit around in an area and then basically they'll start to drop off and when they started drop off, if there's no new funding, no new investment coming in, that is when you got to jump out, that's when you got to sell because otherwise, you're gonna write it down to the bottom, you know, you're not really going to get what you want from the property. It doesn't mean that property price prices won't keep growing, but they're not going to grow the same as an area that has massive investment. That's why it's critical that you consider this. Shops, schools, major transport links, major employers, major investments are property fundamentals. How do we actually apply the property fundamentals in real life?

Video Transcription About How to Implement the 5 Best Property Fundamentals

How do you apply this? So things are changing quickly. Now with property, there's lots of Prop tech firms out saying, you know, they're going to change the world or how things are done. It's not really happening, it's happening quite slowly. For most people, and most we want to, it's, in fact, the biggest change that has just happened really, in how you do research is using chat GPT, or the open AI architecture. And you can use that in a number of ways. But what I recommend you do is don't make the mistake of using it and thinking that is correct, that it is right. If you're going to use chat or any AI program, I use write Sonic, it's, you know, similar thing, but it brings in the Google results as well. And there's a number of different things.

There's the AI playground, I think it is called GDP playground or something, open AI playground, there's a number of different AI things. So what I do is I start my research off of that, so I start putting things in there, you know, so, you know, tell me about All right, a 300 page, or 300, word report on education area, or universities, or high schools, Junior Scholars, that sort of thing. You know, the shop, so I'll go, you know, writing about the investment in area, the problem I find with a lot of this now, is that what it does, it'll give you a good starting block to then go and research further yourself. So I start off with AI, and then I go to Google, and looking further. Then it's just a series of questionnaires. Now the best thing to do, dump on the website. And in the member section, I'll have it, I'll have it like that, just on the front dashboard. So if you jump in there sign up. And then you can download a whole heap of stuff, we've got a calculators, little that sort of thing, there's some quizzes that I'm putting out as well. But I think the key here is get the format. I've got it, you know, just got a tick box that I use, and it's got notes that I can write. And I literally just go through like that I keep it simple. But I start off online, and then I go offline. So then I'll go and see the area view to view the area, that sort of thing. When I do that, actually, it becomes pretty easy it becomes once you do it a couple of times. And what I started off doing, you know, many, many years ago was I literally just started going out and doing viewings on properties, and taking my you know, my notepad in my pen, and just going through making notes. And then what I did is I bought a framework around it. Now that framework is built into, I think there's about 150 questions, but what I'll do is I'll chuck that online. So you can actually download that as well. So you can see the level of detail that we go into with this development sites.  

And I think one of the key things for this is that when you're applying it, this is about getting the property fundamentals because what we want to do is want to do the property fundamentals. And then the other aspect of this, which I'll take you through later on is the cashflow side. I mean, look, property fundamentals, most people don't do, most people listen to salespeople, which is bullshit. Sorry, I said that. I'll edit it out. But the reality is, they don't do it. And then they don't get a really good cash flow worksheet. For me the property fundamentals plus the cash flow equals, we're in a knowledge of whether I should go ahead with this or not. And really what I'm trying to find out when I do this is red flags. So I'm trying to look for good things. I'm trying to look for bad things. And the problem is, oftentimes, there's always good things. I can see if I want to sell a property or a development or an area, I can find the good things, but it's the red flags that generally are the ones that take out it as an investment because that's normally the things that will wipe out the chance to make money and that could actually be that could be because for instance, the developer goes bust because it could be the building the Block Manager a bunch of idiots and may not have treated it. Well. It could be that you've got neighbors that are crap, it could be this high crime area. It could be the local councilors crap it could be. So there's a number of things that go wrong. And so I tend to look for red flags like that. We can all focus on the good, but in this case, I want to focus on the bad because it's generally the bad things. That takes it out.

Video Transcription About How Important Are The Property Fundamentals

So look, property fundamentals, shops, schools, transport links, major employment, major investment, how important are these international grand scheme of things? Can you just get by without doing? And the answer is absolutely, yes. And the answer is most people don't actually research these most people are, the system that we use in real estate is one of urgency. So everything's urgent got to be done today, I've got other people looking at it, there's offers on the table, you know, it's all about urgency, rush, rush, rush, rush, rush. A lot of people think and believe that still twice real estate agents got a bad name. And it's one of the reasons why, you know, my this, the process that we go through with our clients is, you know, we can take five hours chatting to them before we even show their property, because we want you to get the framework, right, and then move on. Because if you get the framework, right, most people don't have a framework to invest with.

So that's one of the key things when you're doing this is one of the reasons why, you know, this daily thing, the videos that I'm doing is one of the first things I've covered is fundamentals, because if you don't understand it, it's where things go wrong. And also and this is the real key. Because look, if you don't do them, you know what you might turn out to be perfect, a wonderful property, you can make money in it. But here's the challenge. All right. The fundamentals, if you get the property fundamentals right up front, that actually you're almost locking in capital growth in the future, not just now, but potentially in the future. That is really what we're doing this for, look, if you're looking for a home, you're gonna look at slightly different things. But actually, property fundamentals as we've been through it, is really just what the people want the most out of their property. And that's it, you know, shops, schools, transplants, major, major investment, that's what we want. What determines the biggest value and biggest rent is the best investment, the best employment in the area, the best transport links? So that's the key here, you don't have to do it? And look, I'm not going to say, Absolutely, you're going to do it. But you know, you should, you should have a simple framework to do it. That's where the AI can help you out, type in those questions, pull out that, then take that information as a basis thing going doing research, spend about an hour or two, I mean, you're making the biggest investment of your life and a lot of these properties. And yet people won't spend two hours to get it settled as to what is actually on offer what the property fundamentals are. All right. And then the other thing, which is the series will do soon is the cash flow side.

You need to know about how the money flows, you need to know how the property fundamentals you know, fundamentals don't flow so much they stay the same, you know, and gradually degrade over time without investment. But if you've got lots of investment continually, then great, you know, that's where it works out really well. So guys, that's pretty much it for this series. Any questions you've got make sure you like, follow subscribe, anything you want to know about property, any question that anywhere, you know, the principles and the property fundamentals that I teach, are a worldwide, they apply to all markets. And the reason they apply to all markets. Irrespective is because you're dealing with humans and human nature doesn't change wherever you are in the world. I've worked in about seven different markets, I own property in three different markets. So I know these markets really, really well been in state aid for 30 years. So pretty much any question you can get, I can answer from a property fundamentals perspective, from a systems perspective, from an actual practical, what actually happens perspective and you know, that you want is you don't want somebody who's just read a book and going off theories. This is real practical, you know, over 1.3 billion pounds of property sold. Happy to answer I'm happy to record videos. You know, I'm here for whatever questions you need. It's what I what I live, eat, breathe, sleep, and I was gonna say shit, but I won't and I did say about you know, as property fundamentals. So anything you need to know, by all means get. 

Brett Alegre-wood
March 6, 2023

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