Finding the right investment property can be an overwhelming process, especially if you have no clue what you’re looking for or where to begin.
For first-time investors, choosing a property is not about visualising yourself living in it. It’s all about the numbers going in your favour and your self-assurance that the property is going to meet your requirements to help you accomplish your investment goals.
What are these requirements and how can you be sure that the property you’re choosing is going to fit you?
Here are the following factors you need to consider when looking for the right property investment:
- Identify your strategy
Every person will approach property investing using a different strategy. Some will want to just grow their portfolio and acquire as many properties as possible, while others may want to attempt renovations and sell the property for a higher price. Knowing what your investment strategy is before you begin to search for properties will help you narrow down significantly what you’re looking for.
- Determine your budget
If you know how much money you have to invest, you can quickly remove areas and properties that you cannot afford. Don’t forget that numbers will play an important role when you’re purchasing an investment property. If the numbers don’t add up, it means the property is not for you.
- Know your property type
Identify what type of property you want to invest in – whether a house on land, a unit, a townhouse, or another type of property. Settling on a property type and only looking at these properties will prevent you from feeling confused because you are comparing the same type of properties.
Each property type also has varying requirements that you need to look at and evaluate. Focusing on just one property type will also help prevent you from making mistakes when doing your due diligence.
- The location
There are plenty of locations where you can buy a property, and choosing a location can derail investors from taking the first step.
Start by choosing a state, then a region, then a suburb, and finally the best area within that suburb. Being unfamiliar with the areas you’re considering can muddle the process and your experience. Check out suburb reviews to find out the comments and ratings of different locations.
In addition to the above, there are questions you need answers to.
- What infrastructure can be found in that area?
- What is the demographic?
- Are there jobs available there?
- Is it easy to access services?
You also need to know where the location is in the property cycle. Is it in a bullish market where properties are selling fast or a slowing market where you have your choice of property? Is demand for rentals strong?
If you’re finding it hard to choose a location, then the smart thing for you to do is start on the areas that you’re familiar with.
When you have figured out all these four factors, then you can begin to narrow down on your property requirements in terms of size, number of bedrooms, number of bathrooms, garaging, etc.
But until you have done your research and have identified your property requirements, your search for a property investment is nothing more than guesswork.