What is the SSI?
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.
How does the SSI work?
All SSI scores are derived by combining a number of statistics. Each statistic is given a higher or lower priority depending on which strategy a market is being scored for.
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. Then each statistic is combined using those priorities to give a single score for a market's suitability to the particular strategy.
Why is the SSI important?
Although the DSR+ is the best overall indicator of immediate capital growth, not every investor has the same strategy. So not every investor want's the same score. The SSI tweaks the combination of statistics to suit investors of varying needs.
If you have a specific strategy for your next investment property, then using a pre-built index to gauge suitability for a specific market is a great check point.
You can examine the SSI statistics from the SSI tab in the Suburb Analyser if you have the appropriate membership. Not all members have access to the DSR+ or SSI tabs.
Is the SSI reliable?
Yes, each SSI 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.