Choosing to purchase an investment property could go wrong if you do not adequately research the market. There are plenty of tools, especially online, that can guide you to finding the right property for you.
Choosing to purchase an investment property could go wrong if you do not adequately research the market.
You may assume that researching different suburbs and properties will be a lengthy and tough process, but there are plenty of tools, especially online, that can guide you to finding the right property for you.
There are three main areas where there are possible risks: location, property and the lender.
Property ‘hot spots’ are always a popular topic and experts are constantly trying to predict the up and coming areas. The sceptics would say that just by broadcasting that a location is a hot spot that people are drawn to it and it becomes a self-fulfilling prophecy. Look carefully into why they are indicating that it is a hot spot and then apply this reasoning to other locations you are researching. It may be things like a new industry coming into the area that is providing more employment or a new freeway being constructed that will decrease travel times to where people work. The best hot spot is one that you uncover yourself and you get in early before others rush in and inflate prices.
The reasons why you would want to live in a certain area will be similar to other people. Keep in mind your target market and focus on trends in what they are looking for.
Without properly researching a property, you could end up spending more than you should or purchasing a house that is in a bad condition.
To ensure you are not overpaying for a property, you will need to look at what similar properties are selling for in the area. Remember it is actual sales that provide the best indicators not what they are listed for. Real estate agents are a great source but are also representing the seller. Instead of just telling you about how much similar properties are selling for ask for actual sales in the past few months to ensure that it is not all hypothetical. Speak to several different agents from different companies for an even better overview of the suburb. Recent property sales can also be found online and you can pay for reports that provide them. The Free Property Report on our website provides price information on the suburb as well as a good selection of recent sales.
Building and pest inspections will help manage the risk of buying a property with underlying issues. Without these reports you risk paying too much and then having hefty repair bills when you uncover them. However, it is important to remember that even if there are problems you could use this in your negotiations on the purchase price. Get quotes on how much it will cost to remedy the issues and present this to the seller to show them the actual repair cost. If you are then able to do the work yourself and spend less, then you should be ahead.
When you apply for a home loan, it is important to remember that you will be in a relationship with your lender for quite a few years, so it is worth taking the time to find the right one for you.
According to the Australian Mortgage Snapshot Study 2013, 83% of Australians choose their home loan provider based on interest rates. However, in order to find the right lender, you should look beyond the rate they are offering.
Loan features are an important and can help you pay off your home loan sooner. 100% offset accounts and free redraw can help you utilize your savings in reducing the interest on your loan. Being able to split your loan according to different purposes or even revert to interest only for a time, can be examples of having a home loan that works for you.
Great customer service can be extremely helpful and save a lot of stress. Research online to find out the experience of other people with different lenders. Websites like productreview.com.au provide a lot of insight into the positives as well as the lenders response if things don’t go so well. It may be worth having a slightly higher interest rate but have a lender who is easily contactable, and who can provide ongoing help and advice.