Buying an investment property is always a big decision and knowing what to looking for is half the trouble. Investing with thought not haste, is certainly a key to getting greater return from your investment. These tips will help you avoid some of the investing traps.
1. RESEARCH– When investing into a property don’t just look into the property itself but the surrounding area as well. Will the area grow, are there jobs, schools, public transport and other professional services in the area? These are integral to any potential tenant.
2. TARGET MARKET– When buying a property take into account that when you go to sell it who are you going to sell it to, an owner/occupier or resale to another investor? As the surroundings of the property (residential etc.) can determine the best buyer for your property.
3. GET A PROFESSIONAL OPINION– Get a better idea on the value of your property with an independent property evaluator. Get a professional opinion on how much your future asset will be worth when the time comes to buy. If the asking price exceeds that of the fair price you should not proceed and wait for a closer price to that of the evaluation.
4. THINK WITH YOUR HEAD– When investing into property you need to remove emotions from the equation and think intuitively. One of the greatest things you can do is put yourself into someone else’s shoes and ask the question, would I live here and pay the current market rent to do so? If you wouldn’t live there and you were the target market then chances are that property is not for you.
5. TIME MANAGEMENT– Buying an investment property is time consuming and stressful and sometimes decisions can be made quickly and cost you tens of thousands of dollars. Sometimes if you don’t have the time it’s a better option to employ a buyer’s agent who has the time and a professional background to help you make the right decisions and grab a great deal at the same time for a small fee.
6. NEVER KNOCK THE NEIGHBORS– If you are keen on a potential house on a particular street try knocking on the doors of the neighbouring houses and ask your potential neighbours what their opinions are of the street and neighbourhood. Sometimes you may be very interested in the information you might gain from people who already know the lay of the land.
7. MANAGEMENT– When choosing a property manager take a few minutes to talk to the person you are looking at employing and don’t base your decision on their fees alone. See if they have the time to answer your calls and aren’t afraid to call you. Try an email and review the amount of time it takes for a reply. This will give you a great idea on how well they communicate and manage their time. These two elements are extremely important skills that a good property manager should possess.
8. LOOK TO THE FUTURE– Look at the places that are currently growing in sales and take a look at the adjoining areas. Sometimes the areas that aren’t looked at right now are prime for future.
9. LOOK FOR ANY HIDDEN COSTS– Any unexpected fees or levies have the ability to erode the potential return. So be sure to do your own research before signing on the dotted line and find out those fees through a professional or a person who has the experience already.
10. BUY WITH MONEY NOT EMOTION– When buying a house look at it analytically. Weigh up the pros and cons, determine the stature of the property and the outcome of your potential investment. Don’t simply buy the property because it looks aesthetically pleasing. Remember you can’t always judge a book by its cover.
Have more questions? Call Property Pursuit for all of your property buying and management answers (07) 3177 3399.