How To Find An Investment Property?
Traversing the real-estate business can be daunting, especially for first-timers. There is no right or wrong way of carrying out a business. However, there are some fundamental steps that you must not overlook to get a strong footing in the real estate business. So, given below are some insights to help you start on solid ground and make this competitive business a lot more straightforward and less intimidating.
Where to begin?
1. Determining Your Investment Goals:
Have a clear idea of what you want to achieve by investing in property. Is it a steady rental income, long-term financial growth, or a mixture of both
2. Do Your Market Research:
Research and analyse the local real estate market regarding the current trends, rental rates, and property values. List the areas that are high in demand and have good growth potential.
3. Identify Potential Properties:
Take help from online listings, local real estate dealers, and networking to locate potential properties that are well within your budget and meet your investment goals.
4. Inspect the Property:
Make sure to thoroughly analyse and inspect each potential property so that you don’t make mistakes to buy a home concerning its condition, expenses, potential rental income, and any risks associated with the property.
5. Get Your Financing Right:
Explore all the available financing options, including mortgages, partnerships, and loans. Choose the option that best suits your investment goals and financial situation.
6. Make a Proposal:
Once you’ve found a property that fulfils your investment goals and budget requirements, make an offer that takes into account both your analysis of the property and the current market conditions.
7. Closing the Deal:
Once your proposal is ready, find a real estate attorney and other related professionals to finalize the purchase process, including inspections, appraisals, and title searches.
5 ways to find investment properties
1. Online listings:
Online listings help you search and shortlist properties by location, price, and other crucial criteria. You can also view photos and read up details of each property. You can choose to get notified whenever new properties that meet your standards become available. Many online real estate websites such as realestate.com.au or domain.com.au can act as a great place to start your search for investment properties.
2. Real estate agents:
Finding and working with your local real estate agents can be a great way to get expert advice and find potential properties.
Real estate agents who specialise in investment properties can help you identify properties that conform to your investment goals, guide you through the buying process, and provide market insights. You can look for real estate agents via various online directories, word of mouth, or by attending open houses. Always remember to do your research beforehand so that you bag only the best real estate agent in the market.
3. Auctions:
Attending property auctions is another way of finding investment properties. They are especially helpful if you’re looking for a bargain. You are allowed to view and examine the property before the auction and make a proposal on the spot provided you’re the highest bidder. However, auctions can be quite fast-paced and competitive, so it’s critical to be prepared and have your financing in place beforehand.
4. Networking:
Networking with other investors and real estate experts, and attending your local real estate investment clubs is a great way of finding potential investment properties. Learning from others’ experiences, getting tips on where to find properties, and even partnering with other investors on deals are some of the benefits of networking. As for finding local investment clubs, online directories or social media platforms such as Facebook or LinkedIn can come in handy.
5. Private sales:
Private sales refer to properties that are being sold by the owner. There are no real estate agents intervening. You can find them through word of mouth, by driving around the neighbourhoods you’re interested in, or by looking for “for sale by owner” signs. Private sales offer a good opportunity to deal directly with the owner and potentially bag a better deal. However, investors must conduct their due diligence and seek professional guidance before making an offer.
What to look for in an investment property
Investing in properties is a multi-faceted business. It requires a lot of research and effort to find the right properties to invest in. To ensure you don’t waste your time on useless properties, here are a few things to look for that would ensure high returns on your investment.
Neighbourhood:
The neighbourhood you pick will determine the types of tenants you draw and your vacancy rate. If you buy a house near a college, you’ll attract mostly students and you could end up having a vacant property every summer. Also, tenants usually prefer rentals that have easy accessibility to public transportation, grocery stores, schools/colleges, and recreation parks.
Local Rental Demand and Average Rents:
Ensure that the property you opt for has good rental demand. This would help avoid long vacancies and help you make a profit out of your rental property. Also, get an estimate of the area’s average rent. Since this rent is going to be your source of income, ensure that the properties provide enough to cover your taxes, mortgage fees, and other expenses. Also, keep a watch on any potential hikes in prices.
Amenities:
The more a property has to offer, the easier it gets to generate interest and garner prospective tenants. This also gives you the edge of charging a rent price that can ensure you make enough profit each month. Therefore, look for parks, restaurants, gyms, cinemas, public transportation links, and other such attractions that would draw in renters. This will help you track down the perfect blend of public amenities and residential properties.
Property taxes:
Since you are responsible for managing the property taxes, you need to be quite vigilant regarding them. They vary across cities and neighbourhoods. You need to be insightful enough to differentiate which property is worth the high taxes and which will be deemed non-profitable in the long run.
Conclusion
Finding the right properties to invest in requires a lot of research, footwork, and skills. Having a thorough awareness of your goals, steady finances that can help sustain the initial income-less period, and realistic expectations even after you’ve got your ideal property in hand is the only way forward.