When taking decisions about where and when to buy, many successful property investors follow the same steps that a property buyer’s agent would.
One key factor is not to look at an investment property with emotion. While you do want to make sure it’s an attractive property for tenants, remember it’s not you who will be living there; it’s effectively a business and helping you with a means to an end.
Here are five steps to help you think and buy like a buyer’s agent.
- Work Out Your Strategy
The first thing a good buyer’s agent will ask you is ‘what is your strategy’? Work out your needs, wants, long-term plan. This will help you stay focused and not get side tracked when identifying areas or suburbs that deliver strong capital growth and yield, and the types of properties that will suit a long-term investment.
- Research Your Area
Speak to agents in the area and find out which suburbs you should consider targeting to help you achieve your goals. Look at suburb profiles and get information about recent sales which match your tick-list of requirements.
- Create a Shortlist
Look at each property for sale in the area and cross off the least suitable ones. Price is usually a good starting point! Other factors you may want to consider include:
- is it close to public transport
- what amenities are nearby
- is it a house or in a duplex
Check out locations on Google maps and streetview can also give you a good indication of what’s nearby. Think about what you’re prepared to compromise on too. While you may not want to buy an apartment, if it’s ticking all the other boxes of in the right location, close to amenities, public transport and lifestyle options, it might be worth looking at.
- Look at The Properties and Do Your Homework
Now go and look at those properties! You can also use the time to drive around and see what else is up for sale in the area and perhaps sit in on a couple of auctions. That way you’ll quickly get a feel for what’s happening in the local market.
And ask questions – why is the vendor selling, how long is the settlement period, what are the vacation rates, has the sitting tenant been there long term?
Doing a bit of research in the early stages will not only help you make a decision as to whether you put an offer in, but it will help you with the next step.
If you’ve done your homework, you will be able to turn this into your advantage when it comes to negotiating on a price. For instance, you may be able to negotiate a reduction in price if they want a long settlement.
A few other points to help you with your negotiations is to be friendly and firm. It doesn’t have to be a round figure either – for instance, if the property is asking $400,000, don’t be afraid of putting in a first offer of $381,500. Most importantly, know your top price and when to walk away.
When it comes to the contract, don’t be afraid of putting terms in such as asking for repairs to be fixed by the settlement date – if they aren’t completed by that date, you’ll have room for further negotiations on the price.
We are one of Newcastle’s longest established real estate offices and have helped hundreds of property investors realise their dreams over the past 40 years, so give us a call on 02 4954 8833 or pop into our office for a chat.