Purchasing an investment property can be an intimidating and often risky business, but it is also a way to ensure a solid financial future for those who can master it.
While seasoned property investors will generally have a vast understanding of the property market, many first-time buyers or those relatively new to the property game will often make the wrong and sometimes very costly decisions. Although lucrative opportunities can be found in the current market, it is important for buyers to avoid certain pitfalls that can impact on their return on investment.
Any property buyer should take note of the following tips:
Have patience, don’t be in a hurry
Take the time to do the necessary research.
Location is everything
The importance of buying in a prime location cannot be over emphasised. A property in a bad location will never fetch a premium price, even in a boom period.
Don’t make assumptions
It is always advisable to have a professional home inspector to take a look at the property.
Seek help, don’t do this alone. Rather learn from other people’s mistakes than your own. Most buyers should seek guidance and advice from other seasoned investors and real estate professionals.
Keep an eye on the budget
Investors should undertake an in-depth budget and cash flow analysis in order to ascertain their accurate financial position. Buyers should also compare financing deals from various financial institutions before deciding to secure their home loan.
Whether the property is bought as a primary residence or as part of a rental portfolio, keeping the property in good order is a vital part to ensuring a good return on that investment. Buyers should include maintenance costs as part of their budget and plan and ensure they have the time or capacity to properly manage and maintain their property.
Don’t put all your eggs in one basket
When buying property specifically for investment purposes, it is imperative to diversify your portfolio. This will largely minimise exposure to risk. Buyers should try to buy different kinds of properties in various areas, rather than buying a few properties in one development.
Property buyers should learn as much as possible about the environment they are trading in, consult various experts and make use of professional, reputable and knowledgeable estate agents to assist them in the sales process.