Before You Invest
Category Buying & Selling Tips
Homes Of Distinction’s co-founder Jonathan Broekman gives us his list of "Do's" when looking for your ideal investment property:
Do... look at plenty of properties.
When buying to invest, don’t just grab the first property you look at. Too many investors buy properties because they “look nice,” or the investors don’t want to put the work in to look at what’s really out there. Remember, if you won’t be living there don’t make your investment decision based on your personal preferences. While you shouldn’t fall into the trap of analysis-paralysis, make sure you are thorough in looking through properties. Give yourself a wide range of options, then narrow them down based on the criteria you have already set for yourself.
Do... consider what your market for rental of the property will be after purchase.
What kind of renters are you hoping to attract? Is the property close to a hub of activity that will keep it occupied, e.g. schools, businesses? Will the rental price be appropriate compared to similar properties, your bond repayments, and factor in maintenance?
Do... a thorough financial analysis.
Be realistic. Look at different alternatives to determine which makes the most financial sense, and resist buying property at a higher price or on less attractive terms than your analysis says makes sense. Be wary of sellers that try to over-estimate the value of the property through pro-forma (estimated) data.
Do... try to buy property that the seller is motivated to sell.
If the seller is motivated to sell, you’re more likely to get the price best aligned with your financial goals. So, how do you know if a seller is motivated? Look at the asking price: if the property has been on the market for a year with little-to-no price reduction, the seller is clearly not very motivated to move the property. However, if that same property has been on the market for a year and has had its price moved down considerably, the seller most likely wants to do whatever it takes to get the property off his or her hands.
For more tips and tricks on buying or selling property, please click here or contact us.
Author: Georgie Roberts
