Top tips for buying property
No matter how experienced you are, it’s crucial to have a comprehensive checklist to refer to when making a final decision on buying a property, or to help you to choose between several investment properties. Here are some key factors to consider when buying properties.
– As land is the key driver of capital growth, you’ll want to assess the land vs building ratio. Aim to find properties where the land accounts for at least 70% of the total value and the building a maximum 30% of the value.
– Consider the attractiveness of the location to tenants. Most want properties close to transport, schools, shops, lifestyle facilities and many want to be near the ocean or river.
– You’ll also want to consider the attractiveness of the property to tenants ie. does it have air-conditioning, how secure it is, how much parking does it have?
– Assess rental rates of comparable properties to ensure you’ll be able to afford the holding cost. Also consider if any reasons exist for likely growth of rental prices in the area and for your particular property.
– Think about the expected maintenance costs of the property – anticipating if they are likely to be high or low can impact your final decision.
– Look at the particular location of the property within the suburb – is it in a superior or inferior location or street? This can affect rental rates and resale.
– Look at the long and short-term historical performance of the suburb, and the particular property. If it has recently begun to do well, try to understand why and why you expect it will continue to be a winner.
– It is imperative to assess prospects for capital growth in the suburb and of the property. Try to go by facts only and consider how infrastructure, demographics, economic and social trends may affect growth.
If the process is too daunting, or investors want to ensure the best return on their investment, getting advice from a buyer’s agent is a great option. If the seller has a professional on their side, you probably should too. Property buyers agents have the experience and inside knowledge and know the tricks of the trade to help you get the upper hand, thereby negotiating the lowest price and best terms and conditions.