DSR
Login / Join

SSI-Low risk

What is the SSI - Low risk?

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:

  • Renovate and sell (aka reno flip)
  • Buy and hold
  • High cash flow
  • Buy off the plan
  • Buy at discount
  • Low risk
  • Development

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 - Low risk is a score out of 100 for the suitability of a market to an investor looking to minimise risk. The higher the score is, the lower the risk.

How does the SSI - Low risk work?

All SSI scores are derived using a number of statistics.A low riskinvestment strategy prioritises the following statistics:

  • SOM%
    • Oversupply of property is one of the biggest risks to investors
  • SOM% for land
    • Loads of vacant land can be sold to developers who may create oversupply
  • Vacancy
    • Not having a tenant paying rent is also a huge risk for investors in terms of cash-flow
  • MCT
    • Entering a market at its peak could spell disaster, the MCT protects against this mistake.
  • Yield
    • High cash-flow offsets the investor against periods of high interest rates. If a property can pay its own way, the risk to the investor of having no capital growth is reduced.
  • DSR+
    • The DSR+ is the best overall indicator of immediate capital growth. Getting some equity under an investor's belt reduces their risk of a loss if servicing the mortgage goes pear-shaped.

Why is the SSI - Low riskimportant?

If your investment strategy for your next property is to simply buy a low risk investment, then an index to gauge suitability for a specific market for that strategy is an absolute must-have.

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.

A list of memberships and what privileges they come with can be seen on the Pricing page. To change your membership, use the Profile page.

Is the SSI - Low riskreliable?

Yes, the SSI - Low risk 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.