How to Buy Investment Property?
ch_client = “wealthonline”;
ch_width = 550;
ch_height = 250;
ch_type = “mpu”;
ch_sid = “Chitika Default”;
ch_backfill = 1;
ch_color_site_link = “#0000CC”;
ch_color_title = “#0000CC”;
ch_color_border = “#FFFFFF”;
ch_color_text = “#000000″;
ch_color_bg = “#FFFFFF”;
Once you have your finance approved the next crucial question is how to buy investment property? Some of the important criteria for selecting the right investment property are:
A. It should be in a predicted high capital growth area.
B. Your first investment property should be easily accessible from where you live specially if you wish to carry out renovations.
C. Buy in an area that you are familiar with and have some knowledge about.
D. Buy an average house in relation to the neighborhood because it will make it easy for you to compare values and assess rent potential.
E. Buy from a motivated vendor below market value. This will give you instantaneous equity.
F. Initially buy investment property for cash flow rather than capital gain.
G. The property you buy should be in an area that is easy to rent. Check not only the rents in the area but also the vacancy rates.
The next obvious question after how to buy investment property is how to find the perfect property?
ch_width = 120;
ch_height = 600;
ch_type = “mpu”;
ch_sid = “Chitika Default”;
ch_backfill = 1;
ch_color_site_link = “#0000CC”;
ch_color_title = “#0000CC”;
ch_color_border = “#FFFFFF”;
ch_color_text = “#000000″;
ch_color_bg = “#FFFFFF”;
>>
Which is the best place to start? Without doubt your search should start with the internet. The internet will save you hours and hours of your time and effort. The old theory on how to buy investment property will tell you to visit 100 properties, short list 30, make offer on 10 of them, get vendor response on three of them and finally buy one does not work in this fast paced world. You will lose interest after viewing 5 properties because of the leg work involved.
You must sign up for a popular internet real estate site in your area. Most sites will give you an option to search by price range, location, number of bedrooms and key search terms.
In your preferred area and price range (depending upon your finance approval) look for properties that have maximum number of bedrooms and land area. Number of bedroom will decide how much rent you will get from the property. A four bedroom house will normally command a better rent than a three bedroom house. So in your budget try and buy a house that has maximum number of bedrooms. A large land area will give you options for the future. Always remember buildings depreciate in value whereas land appreciates in value.
By entering words like ‘motivated vendor’, ‘diseased estate’, ‘mortgagee sale’, ‘urgent sale’ etc in the search criteria you can short list properties that are like to be sold below value.
Once you have sort listed the properties don’t rush to view them. Save fuel. It is very expensive and you will also save the environment. You must now speak with the real estate agents of the short listed properties on phone to find out about the condition of the house, construction materials, likely rent, vacancy rates in the area, government and market valuation, location of the house in relationship to the land, proximity to schools, public transport, other amenities and as to why is the vendor selling the property.
Try and collect all the facts and financial figures like land rates, body corporate expenses, insurance rates etc. You must feed these figures into a property investment software (you can choose from many software’s available in the market depending upon your budget) to arrive at gross return, net return after tax, IRR and cash flow. This small investment is a must and will help you compare various options available to you.
Only after you are satisfied with the quality of property, numbers and financial returns should you fix up a time to view the property.
Another important fact you must remember is that most good investment properties sell before they are advertised in the newspaper or come on the internet. You have to befriend few real estate agents in the area where you wish to buy the property and tell them of your requirement.
Real estate agents love to work with professional real estate investors because they get repeated sales. It is very important that you give them due respect and do not waste their time. A good real estate agent will inform you regarding properties that are not even listed and are likely to come to the market shortly. You can do your due diligence on these properties and react before anyone else does with cash offers.
How to buy investment property can be a very simple and an enjoyable process if you follow the fundamentals correctly.
var infolink_pid = 45553;
var infolink_wsid = 0;
ch_client = “wealthonline”;
ch_width = 550;
ch_height = 90;
ch_type = “mpu”;
ch_sid = “Chitika Default”;
ch_backfill = 1;
ch_color_site_link = “#0000CC”;
ch_color_title = “#0000CC”;
ch_color_border = “#FFFFFF”;
ch_color_text = “#000000″;
ch_color_bg = “#FFFFFF”;
Amazon.com Widgets
Return from How to Buy Investment Property to Beginner Investment Guide
