It’s easy to fall in love with what’s familiar. I know, because I’ve been there. When I first started investing in property, I followed my dad’s footsteps and focused on the south-eastern suburbs of Melbourne. It was our comfort zone, a place we knew like the back of our hand. But let me tell you, comfort zones can be a recipe for disaster. Or, as I like to put it, a way to scramble your investments!
My Journey Beyond the Comfort Zone
I remember the day a job opportunity took me to Brisbane. Suddenly, the Melbourne market, once so promising, seemed out of sync with what I needed as an investor. Supply and demand dynamics had shifted unfavorably. In contrast, Brisbane offered a fresh opportunity, not to mention a cheaper price point.
I knew it was a risk, stepping into unknown territory. But it paid off handsomely, and I caught a market wave in Brisbane that taught me an invaluable lesson.
Understanding Concentration Risk
That success in Brisbane wasn’t just luck. It was a wake-up call about the dangers of “concentration risk” – having too much investment exposure in one area. If that one specific area underperforms, it can drag down your entire portfolio.
The OpenCorp Way
At OpenCorp, we understand these dangers, and we strive to mitigate them. Our acquisitions team spends all day, every day scouring the country to identify the best investment opportunities. They put in 20,000 hours of research into different areas in 2022, including reading State budgets, infrastructure plans, planning schemes, developer briefings, economist and market reports to name a few of our data sources.
Knowledge and Context
The method we employ emphasizes knowing the market better than the locals and understanding the broader national context. It’s a principle I’ve come to appreciate more and more over the years. One needs context, like seeing how a suburb might be underpriced relative to others, something locals might overlook.
A Call to Action – Be Bold, But Be Wise
Investing interstate is beneficial but also risky if you don’t have the systems and tools in place to understand the market. It’s a lesson I learned through my own experiences.
So here’s my advice to you: don’t just cozy up to the familiar. Be bold and explore the different market cycles of various states and cities to de-risk your portfolio. And if you’re not an expert, find comfort in knowing that we at OpenCorp are here to assist.
Are you ready to take the next step on your investing journey but don’t want to risk scrambling your nest egg in one local basket? Reach out to us, and we’ll develop a personalised property roadmap and take you through the exact steps needed to set you on the path to sustainable, low risk wealth creation. Your journey to a diversified and robust portfolio starts here, and I can’t wait to be part of it.