Grid Variance Analysis
The program and the process is called Grid Variance and for the benefit of those who have not heard about the process, it involves breaking down large populated areas into sections (grids, but more practically – suburbs) and then analysing the properties for sale in the area to get the average low, mid and high price ranges. The logic is that areas where there is the greatest variation between the mid to low and mid to high represent the best areas where renovations and redevelopment are likely to achieve the best financial returns. The same process can also be used to identify areas with the potential for organic growth when price growth has fallen behind neighbouring suburbs.
Simple isn’t! And it works!
In practise though it is not so simple. It involves trolling through screen after screen of properties for sale on Domain.com.au or Realestate.com.au and manually calculating the low, mid and high price points and then calculating the percentage variation.
In many cases this is complicated by the lack of advertised prices and small samples. In the end the result is likely to reveal that the area does not have substantial price variations so you need to repeat the process for the next area. The process may help us to find a suitable area for investment but what next? We need to know where all the available properties are located before we can make a decision about a potential investment.
It is boring and extremely time consuming and the results you get today will be out of date as the market changes. Mapping the location of the properties is not impossible but it is even more boring and time consuming without any real guarantee of success.
So the answer is simple, I have written a program to do it ALL! And this is what it does.
- The program extracts properties for sale from the internet based on your selection criteria.
- Selections can be based on a single suburb or can include the selected suburb and all surrounding suburbs.
- Different property types such as houses, townhouse etc. can be selected and analysed separately.
- The selected area can be based on a post code.
- Properties for sale within a selected walking distance of any address or infrastructure can be analysed.
- Properties already sold can be included or excluded to increase the sample.
- The analysis can be done on properties for sale or properties for rent.
- Analysis can be done on up to 8 years of previous sales history.
- Property land size can be extracted and displayed on the reports.
- All properties that meet the selection criteria are analysed and the average low, mid and high price ranges and the variations are calculated and displayed. The screen can be saved and/or printed.
- Prices are found for almost all properties, even when the price is not listed in the advertisements.
- All the properties are listed and the prices are colour coded based on their price points. The list can be saved and/or printed.
- The locations of all the properties can be displayed using Google Maps with markers colour coded based on their price points. This is it! This is the feature that separates the men from the boys in real estate investing!
- The map display can be changed dynamically to show only those properties in a particular suburb, or based on the number of beds.
- The property markers can be expanded to provide the property details and a link to the real estate advertisement.
- The raw data can be output so you can do your own analysis.
All this in a few minutes, and it can be repeated over and over again, it is simple and it is quick!
Apart from just producing raw numbers, the mapping is an outstanding feature. The fact that the program finds unadvertised prices is also outstanding, try that manually!
From an investment strategy point of view, these are some of the advantages.
- The mapping allows you to see at a glance which areas in a suburb have the lowest and highest prices.
- You can instantly identify properties of a low price point that are in areas of generally higher prices.
- You can also see areas within a suburb where the greatest number of sales or rentals are being achieved.
- The program helps to identify suburbs that may have fallen behind surrounding suburbs in price growth.
- The ability to select based on walking distance has numerous advantages.
- Find properties close to Universities that may be suitable for student accommodation.
- Find properties close to Hospitals for medical staff accommodation, aged care or medical suites.
- Find properties close to railway stations or transport hubs suitable for townhouse or apartment developments.
- The reverse can also be applied, avoid properties close to other developments or undesirable infrastructure.
- Find properties close to employment centres, shopping complexes, you name it, you can find it!
- Selections based on rentals will show you which areas have the best rental returns.
- Selection to analyse previous sales history helps to identify areas with potential for price growth.
From a personal point of view we all want to buy our homes (PPR’s) so that we can achieve good capital growth either to leverage equity for investment or just to provide for our retirement.
This program will help us to buy our homes in areas that will achieve the best financial outcome to satisfy out personal goals.
Many of these functions and capabilities are unique and not available in any other software or on any websites available today!
The program is distributed as an annual licence fee for $450 plus GST ($495) per year for one PC. (A 50% discount applies in all subsequent years)
Licences for additional PC’s in the same household will be issued at a fixed annual fee of $90 plus GST ($99).
You can download a tutorial video that demonstrates the program as well as detailing the limitations at http://youtu.be/8ZYM6fQGA7A and an updated version of the program at https://youtu.be/gqMtHAOm0Mk
Interested? Send an email to email@example.com with your contact details and I will send you more information.