Principles & Property Investment Strategy

EQ Property has developed a guiding set of principles and an accompanying methodology to grow your property investment portfolio. This unique and proven approach has allowed EQ Property’s Director, Giles Hill, to grow his personal property portfolio to more than $20M. He now shares the following strategies with his clients to help mitigate their risks and maximise the return on their investments.

EQ Clients are successful professionals or business owners. They do not need to supplement their income with meager and taxable rental income. However, they do know that significant wealth can be created through strategic property investment, and that it is achieved through capital growth rather than rent. Strong capital growth, over time, can build an asset base that will give them lifestyle options and financial security for the future.

What makes property Prices Grow

To build an asset base for the future the focus should be on growth. It's important to have a high-level understanding of what makes property prices grow.


Obviously there as many factors that affect house price growth, but we focus on the two most important factors and what directly impacts upon them:

1.   People's access to Capital / Money

2.   Consumer & Market Sentiment

It’s as simple as that! These two are intrinsically linked. If people have money, then they are happy and when they are happy, they spend it. Australian’s, when they have money, spend it on homes. It’s a deeply rooted cultural obsession.


So, how do people get more money? There are two primary ways:

1. Declining interest rates

When interest rates go down people can borrow more.

2. Wages Growth

When people get paid more, they can borrow more.

It is important to recognise that these two effects don’t typically occur at the same time. Therefore, it is important to recognise where we are in the current property cycle and where we may be heading.


We are currently seeing strong house price growth due to low interest rates. This growth is seen nationally as everyone benefits from increased borrowing regardless of location. On the other hand, wages growth, which is currently at record lows, happens only locally where workers in specific industries achieve the best pay rises.


Understanding what drives price growth and where we are heading, at any given time, shows us why investing in the right location is of paramount importance.

Organic Growth

Over time property prices increase. The rate of growth is not constant, and as, discussed above, growth is dependent upon home buyers’ access to capital. This is driven by macroeconomic and microeconomic factors that are out of our control. The fluctuations that occur are what are often referred to as property market cycles.


We can’t control the growth and it varies widely from location to location. However, what we can do is to invest intelligently. If we understand what the drivers are that determine why some areas so significantly outperform others, then we can position our properties to ensure that they achieve the best possible growth that occurs.

The key factors in determining success are property location and time held. Get the location right and over time, ideally 10 or more years, strong growth can be expected.


EQ Property believes that asset location is paramount and the value we provide is in identifying the best locations to invest, from both a macro and micro perspective.

We refer to suburb selection as macro and street and dwelling selection as micro and the selection of each is based on specific search criteria and knowledge, and is extensively data-backed.

Macro focus on:

1. Demand for homes

2. Limits in supply

3. Changing Demographics

Micro focuses on:

1. Property types

2. Street position

3. Amenity

4. Value ad upside

By selecting the right property asset in the right location will, over time, deliver the best possible price growth within its price range. At EQ Property we refer to this as Organic Growth. The growth is determined by economic factors and is beyond our control, our focus is to ensure that the property is geographically located to deliver the best possible price growth.

Manufactured Growth

At EQ Property we relish the opportunity to maximise investor returns, and to this end, where appropriate, we will supplement the investment properties Organic Growth with Manufactured Growth.

This we can control, and therefore we can determine when and how to exercise this option. Manufactured growth is achieved by altering the asset, taking it to the highest and best use. This can include renovation of the property or development and subdivision. This again when done intelligently can deliver exceptional results.


By intelligently employing both strategies, Organic Growth and Manufactured Growth, significant financial rewards can be achieved.

Choosing the Right Location

Choosing the right location is the basis of all property investment success. Identifying where the opportunity lies is not as easy as it might seem. EQ Property looks at all the indicators that lead to the latest investment opportunities. One of the most important indicators is the strong demand for homes with limited supply. Also, demographics must be favorable with good wages and the potential for strong wage growth. These variables call for a keen understanding of data to analyse locations and identify the right locations to mitigate risk and ensure investment returns are always maximised.

Property Search & Acquisition

Property searches must be based on a logical, analytical, and systematic approach with emotions removed from the equation. It can’t be based on rumors or murmurings in the news, but instead on the demographics data that tell a true story about the area, and then a checklist that meets all the criteria set out by EQ Property’s proven methodology. The checklist considers three important factors:

1. Is this an area in high demand from both owners and renters?

To ascertain demand, EQ Property analyses the area based on data that forecasts:

  • How many people are expected to move there
  • How many new homes will be built
  • How the infrastructure budget looks
  • How many businesses plan to establish themselves there
  • What are the vacancy rates

Strong demand means there will always be a buyer and renters.

2. Are there any limitations to the supply of homes available?

Supply is explored based on the following data:

  • Are there factors that restrict supply in the area
  • Are there any limitations on the number of homes or dwellings that can be delivered to support the demand in this area
  • How much land is available for development
  • Can high-rise buildings be approved in this area
  • What are the local planning plans, zones and development overlays

Limited supply leads to competition, pushing prices higher, faster.

3. What are the demographics?

Who lives or aspires to live in an area helps drive prices. We consider:

  • The number of people living in the area
  • The number of people who want to live in the area
  • How much capital do people have to purchase property in the area
  • What jobs do people typically hold in the area
  • The average income in the area

More people with higher incomes increases competition and profit potential as they have more money to compete for the limited homes that are available. Using this formula, EQ Property finds the location, completes a property search, and then advises clients on when and how to buy the properties that will outperform the averages.

Results

Quality-built property assets, with substantial equity holdings, in a desirable location that will provide strong long-term, compounding, capital and rental growth.

Obligation Free Discussion

An obligation free discussion is the first step. As a prospective EQ Property client, we’ll start by understanding you, so we can begin to develop a tailor-made solution to help you achieve your goals.

You’ll start to gain a high-level understanding surrounding the principles of investing so you can begin to see how you can make intelligent decisions that are appropriate for your circumstances.


Current market activity in hand with your objectives, budget and time scales are your unique needs that are matched with the right strategy before we even start looking at specific investment opportunities.

Start With An Obligation Free Consultation

Our Obligation Free Consultations are designed for you to ask us anything you like and start the process of uncovering a strategy suited to your circumstances.

Start with A Free Consultation
Share by: