Investment tip: How to pick the right ‘off-market’ properties

“The market has improved from where it was at the beginning of the year and from the end of last year. Investors are out there looking to buy now and people are seeing that the marketplace is not falling apart.”

As a buyer’s agent, Ms Yoshia helps most type of buyers – from first-home buyers to property investors – buy across Sydney, particularly, the Upper and Lower North Shore, the Northern Beaches and the Eastern Suburbs.

While most buyers are still conservative given that some markets are still on its way to recovery, most of them are open to opportunities off the market, or on-sale properties that have not been officially advertised yet.

According to Ms Yoshia: “What happens is there are a lot of sellers out there today that want to sell their property. However, they either are very private and don’t want to have their neighbours coming through their properties or they just want to try first to see whether there will be enough interest in their home.”

“Therefore, they’ll get in touch with their local real estate agent, and the real estate agent will offer these properties to buyer’s agents. They won't be advertised on the internet or in any print media. It’s just really a personal invitation.”

Even if off-market properties are generally higher in value, there are also opportunities available for those who are just starting to build their portfolio, she said.

“More and more people are going down that path. Before, there’d be maybe 10 to 20 per cent properties sold off-the-market. At the moment, we’re buying about 60 per cent,” Ms Yoshia highlighted.

Growth fundamentals

Instrumental to success in finding the right off-market properties are buyer’s agents, who give the investor access to available properties that are not officially advertised as for sale. Agents who have been exposed to a certain market long enough to establish connections have better chances at giving great options for property investment.

Moreover, buyer’s agents can also help investors understand the growth fundamentals that will impact their investment property, as well as their entire portfolio, moving forward.

Ultimately, investors who work with buyer’s agents to build their portfolio have a huge advantage over those who do it on their own, according to Ms Yoshia.

“I think that everybody can invest in a property and everyone has the ability to go out and negotiate, but those with a buyer’s agent have an advantage because agents have insight… We’ve got a lot more time to do the due diligence and see what’s going on. We’ve got a wider range of opportunities offered to us.”

For those looking to purchase an investment property, whether on- or off-market, she recommended focusing first and foremost on the location of the asset.

Which infrastructure and facilities are available today? How much more will be developed in the future in terms of dwellings, infrastructure and community facilities?

Ms Yoshia said: “For example, going out to Fairfield, there’s a lot of development there because of the airport that's due to be built in 2025... The universities and various other business hubs are coming out there. People are buying investments there now because of the future growth.”

“North Sydney has always been a very, very good place to invest in and it’s becoming even more popular now because of the proximity to the city. Therefore, with the light rail and various other things that are happening along the way towards North Sydney, it's certainly a huge attraction to investors.”

After location, investors are then advised to work out how their finances will work throughout the investment period. From a yield perspective, Ms Yoshia typically encourages her clients to keep the cost down.

She explained: “In most cases, I look for an older-style block, where there won’t be any high maintenance fees. In other instances, there could be an attractive leaseback, which would appeal to some clients as the first two years guarantee that they’ll get a rent back from the developer.”

“It comes back to what's important to the individual client, but we always look at it from all aspects – from the yield to the capital growth.”

Across Sydney, the buyer’s agent cited great opportunities in certain parts of the Eastern Suburbs, Lower North Shore, Upper North Shore and Northern Beaches, depending largely on the investor’s goals, capabilities and limitations as well as the type of property that they intend to purchase.

Tune in to Brady Yoshia’s episode on The Smart Property Investment Show to find out how to maximise investment opportunities across Australian property markets – even the softening ones.