Research Matters When Buying Investment Property
At Think Money we are passionate about helping people create wealth and financial security through investing in property. There are very few wealth creation strategies that produce the type of results that investing in the property market can deliver. In fact, over the past 100 years, the Australian property market has generally doubled every 10 years. With the right approach, real estate investment can deliver very attractive returns over the long-term. However research matters when buying investment property for the purpose of capital gains.
There are so many factors that can be the difference between whether your investment property is a profitable purchase or leaves you falling flat. Obviously, you want to invest in a property that has maximum potential to earn you the most money. But how do you identify this? What exactly should you be looking for to support this? What research do you need to do that going to give you the best chance at financial security for your future?
Your fact-finding mission goes further than where to buy and what to look for when buying investment property. It’s more than looking at median houses and recent sales. You want to establish what kind of property is in demand and in which areas. You should be delving deeper into the neighbourhood to see if there are any developments in the pipeline that could impact roads, amenities or schools or something in the works that could increase or decrease the property value.
Consider whether you would rent the property yourself. Is it appealing to you and for what reasons? What features does it have that would make you happy to be living there? Are there facilities nearby that make it an attractive area for your future tenants? Is there a lot of current vacancies at the moment, which may imply it’s a less than desirable area?
It’s wise to consider properties in markets that are known to you. You already have a feel for the area, you’re aware of what the community is like and it requires far less research. If you are not familiar with the neighbourhood the first step is to get in the car and have a drive around so you can experience it yourself. Understand what the traffic is like, what shopping facilities there are and what public transportation is available.
Be prepared for the potential costs involved with your upcoming purchase like property and pest checks, titles searches and rate certificates. You’ll have your legal and conveyancing costs, plus mortgage costs, stamp duty (unless you’re eligible for an exemption) land titles office plus registration fees and more.
Lastly, letting your emotions play a part in your decision in buying investment property is not a smart move. A property may make you “feel” a certain way because of its fancy kitchen or walk in wardrobe or pretty garden but that shouldn’t be the basis of your decision to buy. It is, after all, a rental investment, so it doesn’t matter how much you loved that wardrobe, you’re not the one using it anyway.
Research really matters when buying a property. The Think Money team can help you with all of your property investment and wealth creation needs. Get in contact with us for a free coaching session today to find out more!