What does infrastructure mean to your portfolio?

What does infrastructure mean to your portfolio?

Posted on October 9, 2005 in Buying, Educational blog, Property, Sourcing

Brett Alegre-Wood

Hey guys,

One of my foundational laws of investing is buy something tenantable. This simply means that you absolutely must buy something that the tenant will want to live in, and implicit in this statement is desirability.

Desirability is only one part of due diligence but an essential one if you ever consider letting or selling the property. When considering the purchase of a property I will first take into account the macroeconomic factors such as political stability, religious harmony, governmental stability and other national level factors.

Once I have considered these I will move onto the local or microeconomic factors. The main one of these is the infrastructure surrounding the property.

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So let’s take a look at what this term means to me – Infrastructure.

  • What are the major transport links? Consider local & international airports, major highways, roads. What about buses and trains?
  • What about the major social & leisure attractions? Major supermarkets, shops, off licences and take aways.
  • Playgrounds, parks, bars, clubs, cafes, restaurants, pools and sporting grounds.
  • What about local educational facilities? Does it have junior & high schools, public & private schools and universities.
  • What is the employment potential? Does it have major industries; large employers situated within acceptable travel distance of the property?

Now the important thing is that you don’t get too caught up with things that might be missing from the local area and likewise you don’t become blinded by something great about an area.

After all think about everywhere you have ever lived; was it ever the ‘perfect’ place to live or was it more like an average or above average area but regardless you still called it home, and so too will your tenants call your ‘non perfect’ investment property – home.

Strike a balance between ‘analysing’ an investment and ‘anal-lysing’ an investment.

Once I am happy with the macro and micro, I run the numbers and providing they work for me and my strategy, I buy the property and stop the analysis.

It keeps me free for the more worthwhile things in life.

Live with passion,

Brett Wood

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