Real Estate Marketing Mix

The Real Estate Mix…

…is probably at bit like the marketing mix – it takes many different types of approaches and areas to get it right. For a healthy real estate market to exist many other aspects besides just your normal residential buying and selling come in to play.

Investors are major part of the real estate mix… there are all kinds of investors out there in the market. Some invest in commercial properties and others in residential properties and then there are the developers but they all follow certain patterns. For instance a few years ago I listed a couple of houses in Nullagine… yes, that’s right Nullagine which is approximately halfway between Newman and Port Hedland – a very small isolated community amongst stunning mountainous scenery and large river.

One was already rented but the other was fully furnished ready for contractors coming in and could fetch rents of $2000 a week or more over 6 weeks up to 12 month contracted periods. Because of sales evidence the property was listed for $220k and our office and the owner were overwhelmed by the calls we received from all over Australia from investors who wanted to make immediate offers on the property. There are always people out there looking for a good rental investment. So what is a good residential rental investment?  

Normally a rental will return using the following formula – market price $300k = rental $300 per week but it doesn’t always work that way and investors search hard and long for a good buy with a higher rental return.

Investors fled Nannup when residential town houses reached over the $300k mark while rents at the time were still around the $150 to $230 per week. Using the formula above you certainly wouldn’t be considering buying a rental investment on those figures whereas at the same time you could buy a home in several places in Queensland for $150k to $200k and rent it out for $250 to $300 per week.

This kind of investor is a major part of the real estate mix and finally after town site property prices falling during the GFC a couple of local investors have bought cheaper properties specifically as rental investments and this is because whilst price of properties in Nannup have come down, rents have actually gone up due to the scarcity of available rentals.   This combination has made it once again worthwhile for investors to buy a property and lease as a long term rental.

So part of the real estate mix… is the Investor market and if you lose that section of the market due to over inflation then you really end up with unbalanced market.

Developers are also a major part of the real estate mix… and just as the investors got out during the GFC the developers had no choice but to either get out or wait it out. In some rural towns developers just went to the wall having invested heavily in large subdivisions only to find that when they put them on the market they were facing the GFC and there were no sales to be had. Luckily, others have managed to scrape through.

Developers need to buy the right property at the right price and at the right time… timing is important for development as we have just witnessed what happens you get the property cycle wrong.   The most efficient time to purchase land for development is between the bottom and the first two years in to a rising cycle. This way the developer can buy at the right price and stage the subdivision so that the planning and development of the site can take the lower end of the rising cycle and hopefully sales then come in at higher prices as the cycle rises.

If there are questions you would like to have answered why not email them to and I will be happy to address them in a future article.


Chris Roycroft

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