6 TIPS TO MAXIMISE YOUR INVESTMENT PROPERTY PURCHASE
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1. FIND YOUR WHY
Why are you buying the property? This basic question will decide if your investment is a good one. For example, if you are buying the property to live in, you will be emotionally influenced by things that personally appeal (or don't) to your tastes, whereas if you are buying the property to lease out, positives for prospective tenants - such as accessibility and proximity to shops or schools should take precedence.
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While the Internet is the mother of all research, nothing beats going yourself - on different times of different days - to suss out what the location is REALLY like!
2. STICK TO BASICS
Sound property buying principles never go out of fashion! These include aspects such as:
- the property's location
- the value per square metre
- potential rental yield (bond costs vs rental prices)
- levies, rates & taxes
These will always be key criteria on which your decision should be based.
3. HAVE A PLAN
From an investment perspective, property investors need to think about where they would ideally like their portfolio to be in the long-term. Setting goals will assist buyers to remain focused and will give them something to work towards.
4. DUMP DEBT
While there are always a fair number of cash buyers in the market, the bulk of buyers require financial assistance from a bank. Ensure your application for finance has more chance of success by reducing debt levels and keeping a clean credit record. Having a deposit is also a must for those looking to hasten the purchase process.
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Consider a bond originator like ooba to help speed up this process!
5. BE DEVILISH ABOUT DETAIL
Subtle differences between two areas can drastically affect property prices. Suburb to suburb or even street to street can see prices fluctuate, but if you understand why it's not a problem!
LWP TOP TIP
"Rather buy the cheapest house in the best area, than the most expensive house in the worst area."
A property's location will have more impact on its appreciation potential than the house itself.
If you are investing in property with the intention of renting it out, you need to remember that different things appeal to different people - identifying their target market is essential for a successful venture. If the area is a popular rental once, investigate whether it is saturated with buy-to-let property, to make sure your savvy plan doesn't fall flat.
6. THE ULTIMATE QUESTION...
Would you live there? While the potential to make a profit on a property purchase is important, it should not be the only factor you consider. Besides Covid teaching us that financial plans need to be able to pivot, a good rule of thumb is that if you wouldn't want to live in it, it's unlikely others would! The property must appeal to you, and you have to want to own it or lease it, because any investment from time to time can need your commitment and TLC.
Looking to buy or sell that investment property? Come to the boutique realty agency that promises to take you #BeyondTheSale! www.LWP.co.za
Author: LWP Properties