Congratulations on buying your first investment property! Buying a property can be a great step towards securing your financial future. No doubt it is one of the biggest decisions of your life as you are investing huge amount. There are some useful tips that you must need to keep in mind when buying your first investment property.
- LOOK AT HUNDRED PROPERTIES: It is not exaggeration at all! Most of the investors just look two or three properties in their area and purchase one of them which lead them to pay more than what it is actually worth. Look for multiple investment properties in multiple areas as it gives you better understanding of what properties are actually worth. Searching is key factor in this market, by doing this you can ensure that you buy a property that is going to move you towards your financial goals. Make sure to look for many different properties prior buying.
- RESEARCH THE AREA: Living in an area doesn’t give you the idea of property market and how it is going to perform in the future. If you are buying property out of your area you need to do more research. It is necessary to understand how the area is going to perform in rental returns and in capital growths to ensure your buying is a solid investment.
- CONVEYANCERS VS SOLICITORS: Whenever buying your first investment think carefully whether conveyancers or solicitors are better for your situation. Look into both as in more complex transaction, solicitor will might be better option. While a simple transaction could be handled by a conveyancer as they would be cheaper than a solicitor and able to do the same job.
- GET A BUILDING AND PEST INSPECTION DONE: Prior buying your first investment get a building or property pest inspection. No matter if you have to pay as it can assure that the property is up to standard and doesn’t have any major issues that are going to cost you an arm and a leg down the track.
- SET YOUR INVESTMENT GOALS BEFORE YOU INVEST: The best thing while purchasing a property is setting a financial goal first. People usually make this mistake as they don’t know what properties are going to help them achieve their financial goals because they don’t have any. It is not going to make a whole lot of sense for you to go out and purchase a negatively geared property if you want passive income. Buying a property in a rural area is not a good option if you want fast capital growth.
- TALK TO THE NEIGHBORS: Talking to the neighbors sometimes is less about what the neighbors actually say and more about who the neighbors are. By understanding what kind of people live there you can find a lot about an area so talk to the neighbors before buying. You can visit the local coffee shop and talk to the people. Find out as much about the area as possible.
- DON’T RUSH: Rushing always takes you to the wrong decisions. No doubt, when you buy your first investment you are extremely excited and everybody wants to own it as soon as possible but hold your horses! There is always something for sale, don’t be in such a rush to purchase and buy the wrong property that isn’t going to deliver the financial returns that you desire.
- DO THE CASH FLOW ANALYSIS: Cash flowing is not easy to do but it is very important. Never just assume that because your mortgage is $400 per week and the property rents for $450 per week that your property is going to be positively cash flowed. It probably won’t be. You need to analyze all of the expenses of the property and all of the income.
- DON’T JUST NEGOTIATE ON PRICE: Mostly people go in and only negotiate on price although everything in property is negotiable. They don’t consider negotiating on the terms of the arrangement. There are ways through which you can negotiate a better deal without negotiating on price. Do consider the terms and see if you can create a better deal for yourself.