The first part of purchasing a property is to decide whether you are buying a home or an investment.
Finding a Good Investment Property is a complex process. The main points to focus on are:
- Is there a strong demand for the style of property in the area you’re looking at?
- Is the property near transport and amenities?
- What sort of rent returns can you expect?
- Real estate goes through cycles. Is yours heading for a peak or trough?
- Have you done enough homework to know whether the asking price is fair?
This can be a very stressful time for any buyer. if you prepare well, you can eliminate the unnecessary stress. The process is different to purchasing a home the traditional way because if you are successful at the auction, you will need to pay the deposit and exchange on the property – with no cooling off period. Here is a check list of what to do prior to the auction;
- Has your solicitor checked and reviewed the contracts?
- Do you have a pre-approval from your lender?
- Have you completed the building and/or strata report?
- Do you have your deposit ready and accessible before you head to the auction?
- Do you know what you can afford based on the repayments?
With these questions answered, you just need a little luck to go your way on the auction day.
The debt on your home is not tax deductible so ensure you have a large enough deposit in order to comfortably manage your repayments. Also, be aware of potential state and federal grants and stamp duty rebates that can help you. Having the right mortgage is vital and deciding between a variable or fixed interest rate can provide cash flow security in the early stages of home ownership.
You are looking for an investment, not a home. Just because you might not choose to live in the area or in that type of building doesn’t make it a poor investment. Don’t let personal choice get in the way of making money. This is a very large investment so take the time to get it right and make sure you leave the emotion out of the equation.