Whether you want to build a real estate portfolio or buy a property as a home or investment is an important step to take – it is a long-term decision.
Defining your long term objectives and keeping up-to-date with the real estate market and its elements is paramount. Equally important is choosing the location, establishing a budget and arranging your finance.
When clients say they want to buy a property as a home or investment, my initial response is let’s avoid the traps and make sure they get what they want within their budget.
Research – Research – Research
You need to become well educated. The more information you gather, and the more relevant it is to buying a property, the better your chances are of making the right decision. It pays to be really clear about your property objective.
Put on your jogging shoes and start inspecting between 15 to 20 properties to generate 1 “suitable” property.
The right decision should be based on a short-list of around 3 “suitable” properties – any one of them good enough to buy.
Amongst many elements of your research, one is to analyse the sale history (last 3-6 months) of comparable properties, ones that were withdrawn from the market, ones that were passed in at auction and of course properties that were sold privately.
Once you have decided to buy a property as a home or investment in your chosen suburb (s) and within your price range, it’s time to get serious about finding the specific property you want.
Drawing up a wish-list in order of priority is a must. Writing down your “must haves” and “wants” is the discipline you need to start thinking about their importance in relation to your budget.
As you develop the list you realise what you may be prepared to compromise on and this will help prevent you from getting too emotional about a property at inspection time. It will help you realise what features can be discarded in a property and, more importantly what features can’t.
Perhaps the hardest thing most buyers realise is that they will probably have to water down their expectations that perfect property at that perfect price isn’t always easy to find. You see, to buy a property is a matrix of:
You make money when you buy
To buy a property as a home or investment is not like shopping. Equally important, to buy a property should be considered as part of your retirement plan/objective. You need to be:
- Objective enough to walk away from a property and start all over again.