SSI stands for Strategy Suitability Index. The SSI is a set of indexes used to gauge a market's suitability to a specific property investment strategy, for example:
Each strategy has its own unique requirements in terms of the nature of the market for success. The SSI scores each market based on the statistics that are most important to the type of strategy.
For example, the SSI - High cash flow is highly dependent on low vacancy rates and high yields. The SSI - Reno flip on the other hand is dependent on a quick sale for success. So a low "days on market" is very important for a reno flip.
Each statistic is given a different level of importance for each strategy.
The SSI - Buy discounted is a score out of 100 for the suitability of a market to an investor looking to buy at a heavily discounted price. The higher the score is, the better the chances of finding a suitable property.
WARNING: High discounting is a sign of a market under duress. These are typically not good markets to invest in. Investors are encouraged to avoid the "buying at discount" strategy. Before you embark on this strategy please carefully read Jeremy Sheppard's article published in Your Investment Property magazine titled, "Buying under market value".
PLEASE NOTE: The SSI - Buy discounted score combines more statistics than simply the average vendor discount. The idea is to give investors insight into potential markets, not steer them into a trap. Purely following high discounted markets regardless of any other indicators is pursuing a disaster. As a result, many of the higher scoring SSI-discount markets may not have a high average vendor discount.
All SSI scores are derived using a number of statistics. A Buy discounted investment strategy prioritises the following statistics:
If your investment strategy for your next property is to buy a property below market valuation to lock in instant equity, then an index to gauge suitability for a specific market for that strategy is an absolute must-have.
However, be sure to read Jeremy Sheppard's article on "Buying under market value".
You can examine the SSI statistics from the SSI tab in the Suburb Analyser if you have an appropriate membership. Not all members have access to the DSR+ or SSI tabs.
Yes, the SSI - Buy discounted considers a number of statistics rather than just one. It is unlikely that all statistics or even half of them are subject to anomalies at the same time. One statistic can be out of whack, without affecting the overall score significantly.