When it comes to buying investment property you need to be on your guard and confident. Know the area, where the schools, shopping etc. are and decide on your price, and stick to it.
Most “newbie” investors make the mistake of changing their minds regarding the price they should pay when buying their first real estate investment. It is understandable because the excitement and hype can overcome you. The key here is to plan before hand so you are prepared for anything.
A few things you could do:
- Research the area you want to buy in before you start looking for property. Find out what the growth trends are, do people like to rent in the area, where are the schools, shopping etc.
- As soon as you have an idea of the area and you find a potential investment property find out what the value of the properties in the immediate are is, this will give you a good benchmark to set the price you want to pay.
- Now you need to do the math. Is the property a viable investment at the price you want to pay. If not, walk away.
- If the property is a good investment you can start by making an offer to the seller at around 10 – 20% less than you wanted to pay (this is directly related to the market you are buying in). If you are lucky, the seller might actually agree, especially in the current market. Most of the time you will probably get a counter offer. This is what you want, to get an idea of the “real” price the seller is after.
- If the seller does not want to accept your offer, when you reach your maximum price you are willing to pay, you need to be strong and walk away. There will be other properties.
You need to remember that there are always other deals out there and never let your emotions drive your property investments.
Please feel free to comment. It’s always nice to get other people’s feedback.
Another way to help you do your homework is to do a search on the street or area via Property Spi on property24.com. This will give you a good idea of prices in the area and averages. This will help you to buy below the average price of the area and not the most expensive house in the street.
Another nice program in Windeed. You download the program, or they will post it to you(it is big). You can do a detailed search on the property and ask for a desk top valuation of the property.
Both programs are pay as you go, with no expensive subscription fees.