Real Estate Matters | All you wanted to know about property investment Part 5 – Mistakes to avoid when buying investment property

Juliet Risdon

Juliet Risdon is a Director of JML Property and a property investor.
Having established the company in 1994, JML Property offers Investment Property & Homes. It specializes in managing properties for owners and investors, and providing attractive and comfortable homes for tenants.

This is the fifth installment of an eight part series identifying the key factors in choosing the right investment property and putting your money to work.
Now that you have read the articles on property investment and the Step by step guide to buying in Macau, here are two important things that a savvy investor will avoid when buying investment property.

Using the wrong type of agent
An investor needs an agent that will represent their interests, which is to secure the best possible deal with the optimum conditions for the purchaser.
The conflicting interest to this is an agent who is there to ensure that the best possible deal is done for the seller. Two agents with very different objectives.
Never use the seller’s agent to represent your interests.
The two masters are mutually exclusive and it clearly does not benefit the buyer to be represented by the same agent committed to getting the seller the highest price for the listed property.
Failing to do the research
Buying a property with limited appeal to the broad rental market or a property that does not measure up well against competition in the immediate vicinity is investment suicide.
When buying an investment property, think about who will rent the property today, and who will buy that property from you when you’re ready to sell.
No matter what type of property you’re investing in, if it appeals to only a narrow portion of the market, the demand for it will be lower and the time needed to rent or sell it will be longer.
Doing your homework before you buy will reveal what type of properties are most in demand in the area.
To do this, you can talk to real estate agents to ascertain what type of home renters are looking for.
Search the internet to establish the competition, read the “for rent” ads in the newspaper to determine what features are regularly mentioned.
For example if it’s “sea view” or “close to public transport” or “with car park” you can be fairly sure these are features that are highly sought after and highly regarded.
As far as determining whether the price is a reasonable one or not, you need to do some comparative market analysis.
Not only will this assist you in ensuring you have the best deal, but it will be powerful information when you commence price negotiations.
Finally, as we’ve noted before, it seems everyone’s an expert when it comes to real estate purchasing, and just about all feel compelled to offer advice, courted or otherwise.
The reality is that the only way that you will know whether you have secured a good property at a good price is if you dedicate the time to do your research.
If you don’t have that time, then you can appoint a real estate (buying) agent to do the job for you, a good one will save you hundreds of thousands of dollars.

Next week in Part 6 we look at how to finance your property purchase.

www.JMLProperty.com
info@JMLProperty.com