Part B- Locate your investment property This assessment task requires you to search for and decide on the specific property that you would like to purchase. To do this you will: Use the internet to...

Part B- Locate your investment property

This assessment task requires you to search for and decide on the specific property that you would like to purchase. To do this you will:

1. Use the internet to search for suitable properties within your chosen area. You cannot decide on another suburb or region at this point. You must stay within the area you chose in Part A. You are to also decide what legal interests will be registered on title and why. Review the lectures that discussed title systems to help with this.


2. Search for and compare 3 different properties that potentially meet the needs of your target tenant providing details of each. Don’t use real estate advertisement jargon to do this, summarise the facts yourself, highlighting what you believe are the most important elements of the properties. You are to explain why you believe these three properties are suitable.


3. Decide which property you wish to purchase and how much you shouldpayfor it to achieve your investment objectives. You are to provide details of the location and a description of the property and dwelling, explaining why and how it is preferred for your target tenant. With this part, substantial marks will be lost if you aren’t sensible with your responses. You need to remember you are attempting to purchase a property in an open and competitive market. Therefore, you must research what similar properties have sold for (this information is available at various real estate web sites, just look for the “Sold” tab) and decide what is a reasonable price for yours. Comparative information to justify your decisions should be provided in the appendices. To do this you must use and follow, the principles and process discussed in the lecture presenting measuring value of residential property.

Once you have completed these activities you are to write up your findings, decisions, and rationale. This part of your report should explain your choices and decisions and justifications and will also be approximately 1250 words (max). It will include appendices of images of the information you sourced from web sites, location maps, sufficient detail of the selected property. Specifically, your report will include:

• Details of 3potential propertieswithin your preferred location that you considered and rejected in favour of your preferred choice,


• Rationale and justification for the selection of your property chosen for investment. In this, you are to also explain why the other potential options for the properties were not selected.


• Identify the most appropriate legal interest to register on title and briefly explain how this best supports your investment,


• Calculations to show your assessment of the value of thechosenYou should do this using thedirect comparisonmethod presented in lectures,


• Using your value calculation and potential rental income, sourced by searching the web for similar currently available properties offered for rent, calculate the expected yield of the chosen property. You should use the income valuation method also presented in lectures to do this,


• Comment of your expectation for capital growth and yield. You must provide sound rationale to support your views.


• Specific details of any additional costs associated with the purchase, along with legal and other expenses, this may include proposed capital expenditure to prepare the property for letting,


• Document any risks associated with your chosen property and recommend possible strategies to mitigate these risks,


• Explanation of how your decisions align to and support your investment objectives,


• Identify and document any risks that may be associated with such an investment and what strategies you would use to mitigate them,


• Recommendations about how you can create further investment opportunities. That is, having successfully sourced this investment, what will you do next to build your future financial security?

NB: The above dot points also form a useful guide to sequence your report

To complete this assignment task, you will need to search the internet for information about properties currently available for sale and, to complete the valuation, properties that have been sold and possibly other pertinent information if you’re proposing other options to enhance your investment such as sub-division. All this takes time, so do not leave starting this assessment too long. Also, websites you rely upon must be creditable and provide information that is sourced from reliable entities such as the Australian Bureau of Statistics (ABS). All of which, MUST be accurately referenced.

Report structure

Essentially the report structure is up to you. A sample template is provided below. However, keep in mind the following:

• It must be readable. This means your expression, spelling, sentence and paragraph construction should all be appropriate to communicate your message clearly, succinctly with language in your word document set to the region to which you are writing, namelyenglish (AUS). Marks are lost if this setting is incorrect.
  


• Your arguments should be presented in a logical fashion. This means to think about the task, what you did, what you found and what conclusion you drew from your investigations. These should be presented in a way the leads the reader through your thoughts and analysis to arrive at your conclusions


• Consider how each section informs the other and how you then build upon the information to illustrate your views.


• This is a very difficult task to keep within the word limit. Look for ways of minimising word count. Consider using tables, charts, diagrams, maps to show what you want too, rather than try to explain in detail. Details of finances and data are often best done this way. The word limit is there for a reason. Industry requires you to be able to produce quality information succinctly and this is a good chance to practice doing that.


• Make sure you address the criterion. Stay focussed on the task and whilst you may find interesting information, ask: Is it relevant? Does it provide further justification for my arguments? Does it inform the reader?

If you aren’t sure, utilise the resources of RMIT’s Student Learning Lab. They’re there to help.

In summary

This assignment is to be completed in pairs. This task is worth 15% of the overall marks for the course. The first half of the assignment was to investigate the area in which to buy and why this task is to decide what actual property to buy and why. Like Part A, this assessment is to be written in a report writing style. If you aren’t sure, it is recommended you investigate what this writing style is and follow it with it. The essence of both parts of this assignment is to demonstrate that you can identify, source, synthesise and analyse disparate data to interpret past property market performance with the view of estimating future property trends, justifying your views and interpretations throughout.