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Buying a property this Spring?
Published on 17th October 2012 | No Comments
Springing into the property market? Have you got a plan?
Spring time is the most popular time to buy or sell a property. So it’s likely that more of you will be looking to buy around now. But it’s important not to rush into such a big purchase.
If you are buying a home, you will naturally feel some emotional connection with properties you like. But don’t be ruled totally by your heart.
So how can you reduce the chance of being blinded by that view, garden or location and give a big investment decision the respect it deserves?
Think like a property investor! After all, the home you are buying is an investment – probably the biggest investment you’ll ever make. Experienced property investors look at buying opportunities differently. They start by understanding there are investment choices and make their decision based on facts. If the facts don’t stack up, they move on and look for the next opportunity. This gives them more control of the buying process. It’s hard to have control when you’ve already fallen in love with that huge garage or walk in wardrobe. And it isn’t the best way to make an important decision.
Smart investors have a process for making their decision and they stick to it. Follow these rules and you’ll feel more confident and less stressed by the whole process.
1. What sort of property do you need?
Decide this before you focus on where you want to buy (step 2). The reason is simple. Location is important but because the costs of buying and selling a property are very high, buying a property that doesn’t suit your needs can be an expensive mistake. You also need to balance your needs with your budget so talk to Gateway early so you know how much you can afford to spend (I mean invest). This trade-off between your needs and your budget will also influence the likely location of your future home.
2. Research your Location
Of course, if you can get the type and size of property you need in your desired location it’s a bonus. But make sure you understand what you are buying first. Walk around the areas you like, look at properties on the market that appear to fit your needs, look at recent sales, attend some auctions, let local agents know what you are looking for and how much you can afford, and, importantly, let them know you are going through an investment process.
Start to think about things like the positioning of properties – which properties have the best outlook, get winter sun, too much summer sun, no sun. Do other properties look in on you? And so on. Research will give you knowledge and confidence when you start to look more seriously. It’s easy to do research online as well. Use property portals like www.domain.com.au or get a property data report on your target suburb (very cheap) from RP Data, APM or similar property data provider.
3. Start getting serious
Don’t forget this is when your emotions can take control if you aren’t careful. Remember, you are about to make a big investment. Despite what your heart might be telling you, there is no such thing as the perfect property, as you will find out when you move in. A good way of keeping your feet on the ground when you find a property you like is to undertake due diligence just like an investor would. This means checking out the condition of the property and its market value.
4. Get some good advice
If you were buying a used car, wouldn’t you want someone to look under the bonnet to make sure the engine isn’t about to seize up? So why would you consider making an investment equal to buying a whole car yard without some expert help? Find a good property lawyer/conveyancer, building inspector and property valuer to give you expert advice on contracts, building condition and market value. The costs of these services are tiny compared to the size of your investment and being systematic about your due diligence will give you more leverage in negotiations with the selling agent.
5. Saying No is also an investment decision
Finally, you must be prepared to walk away if a property does not pass muster. Deciding not to buy can seem hard because you’ve spent time and money in getting this far. But now is not the time to compromise. Just be careful you don’t create a wish list that is impossible to satisfy in your price range. Otherwise you might be looking for quite a long time.
Good luck with your spring house hunting.
If you need property inspection or property valuation help, EYEON can help you. Call EYEON on 1300 798 274.