How to analyse a property investment before committing

1. Write the investment thesis

Define the intended result: income, appreciation, renovation, resale, diversification or mixed use. Each objective points to different assets, locations and timelines.

The thesis should state available capital, financing, horizon, minimum expected return and acceptable risk. Without it, fundamentally different opportunities can look comparable.

2. Model the total cost

Purchase price is one line. Include applicable taxes, registration, financing, works, design, licences, insurance, condominium, maintenance, management, vacancy and a realistic contingency.

Use current information and confirm figures with qualified professionals. Repeated small omissions can materially change net returns.

• Acquisition and completion
• Capital and financing
• Works and contingency
• Operation, maintenance and vacancy

3. Read location and demand

Look beyond reputation. Review access, employment, services, competing supply, likely occupants, seasonality, planned projects and resale depth.

A location that is strong for one objective can be weak for another. The asset must answer identifiable demand aligned with the strategy.

4. Test scenarios rather than one ideal forecast

Build at least a base, conservative and adverse scenario. Vary exit price, rent, occupancy, works timeline, financing cost and contingencies.

An opportunity is stronger when it remains defensible under less favourable assumptions. If a small change removes the return, the margin of safety may be too thin.

5. Compare risk, execution and exit

Assess who will execute, which approvals may be needed, dependencies and how long capital will remain committed. A theoretically profitable project can fail through execution.

Define the exit before entry. Sale, refinancing, rental or long-term ownership require different conditions. The final decision should show expected return, key risks and concrete reasons to proceed or decline.