Many of our clients ask this question and our response to them usually is – “What are you really trying to achieve?”
Some people only want to invest in property because they see advertisements in the newspapers crowing some of these lines:
All of these types of adverts promise quick and fantastic returns but remember if it was really that easy everyone would be doing it!
Some investors go on holidays, call into the local real estate agent and all of a sudden they have purchased an investment property “because the agent said we’d double our money in the next 8 years”.
Our advice will always be to do your research in a detailed fashion and to remain wary of any advertisements promising the world.
So if you have never invested in property what should you do?
Investing in property is all about doing the “hard yards” to ensure you have enough decent information to make a comfortable decision about property. A lot of investors will spend weeks researching and haggling on a car purchase, but will not spend the same amount of time researching the purchase of an investment property with 10 times the cost!
When you become interested in a property “do the numbers” to ensure you can afford it. “Stress Test” these numbers to ensure that if you don’t have a tenant for your property, or if interest rates rise, or if you lose your own employment income, you can still afford it. Before making an offer to purchase a property, get a second opinion to ensure you are comfortable of its market value (even if you have to pay for this). When it comes time to make an offer make sure you qualify the offer as being subject to specific bank finance approval, appropriate building and pest inspections and subject to a bank valuation of no less than $xxx,xxx.
In property, knowledge and research are the name of the game! The investment you make in research and furthering your property knowledge could save you tens of thousands of dollars.