Top Tips for First Time Property Investors

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Taking the investment property plunge can bring great financial rewards, however it’s also not without risk. For the first time property investor, there are many things about investing in real estate that are worth knowing to ensure the best possible financial return. Buying an investment property is a different ballgame compared to buying a home to occupy yourself and with that said, here are tips worth considering for all first time property investors.

Be a Rational Buyer

Too many investors buy a home based on their own emotional feelings about the property. This often means they are less likely to negotiate a better price, or believe the property is worth more than the market value and pay too much. Even if you fall in love with a house for it’s appearance, garden or other features, it’s essential to crunch the numbers and do the necessary research to identify the investment potential of the property. Always approach a purchase from a rational financial and investment perspective.

Rushing or Waiting Too Long

It’s easy to get spooked by the latest news about rising house prices, but getting caught into rushing and overpaying at auction or buying quickly without the necessary research can be big mistake. The other side of the equation is always looking for that bargain which may never come and in the meantime house prices have continued to creep up. Had the investor made an offer, they could have been enjoying the growth of their investment. It’s important that if you find a suitable property to move quickly, but moving too quickly out of fear of missing out will also do you no favours.

Assess Supply and Demand Carefully

A good investment property is ideally in a location where there is a demand for dwellings to rent and buy, but one where there is limited supply. Looking at occupancy rates, and what future housing stock is planned for the area will ensure you buy in a location where there is demand. This helps to ensure high occupancy rates and gives you a greater chance of being able to charge a premium rent.

Choose the Right Property Managers

After purchasing, the right property managers will work on your behalf to ensure the home is leased, while choosing the right tenants to help protect the value of your investment. Templeton Property is one company that offers successful property managers that will periodically inspect the property, ensure rent is collected, and keep owners informed of any maintenance needed to protect the value of their home. It may seem a better idea to self-manage a property portfolio, but property managers act as the middle man between owners and the tenant and can mediate if issues arise. They’ll also be the one who is on call around the clock if anything goes wrong and arrange all repairs and maintenance. A proactive property manager can be worth their weight in gold.

Research, Research, Research

It might sound like common sense, but having a thorough understanding of the market where you are looking at buying can pay dividends. You’ll know what you should pay based on the market, when the last price growth was, and whether or not you should look at the ‘halo effect’ by looking to surrounding areas of popular suburbs. It’s important to research the demographics of the people who live in the area and to buy property that will appeal their needs. This will avoid buying the wrong property type like an apartment in an area where there are mostly young families.

Remember that research is essential at all stages of the buying process. Previous sales data, rental yields and other statistics will go a long way to ensuring what you do buy represents a solid investment, right now and into the future.

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