Property investing

bymillea

338 followers

10 years ago

How much should you pay to buy a property:

There are lots of factors with political intervention, supply and demand, location, jobs available, climate, crime, coastal areas and of course finance. Supply and demand in my view is the biggest factor on the prices of properties, regardless where you live. Everything else comes after that. Property buyers should all do their homework on the properties that interest them, like check titles, how much are the local body rates, does it flood (is there a large drain or river near by) capital value, sewage and water connections The Local Council should be able to give you this information. Obtain a current builders and electricians report, does the fireplace have a permit, if it hasn't insurance won't pay if the house catches fire. Is there neighbours from hell.

This may sound like alot of work but this is probaly your biggest investment so why not protect it. Don't get pushed into a sale by a real estate agent/realator as some of them only think of their commission and they do act for the seller because normally the sellers/vendors pay the commission

When Should I buy:

First call would be to make an appointment with your local financier/bank manager to work out how much you can afford. How much rent will you get and so on. Once all that is sorted have a word with your lawyer and start looking for a good agent.

How Should I buy:

There at least three different way's of buying your rental property. The normal straight sale where the agent has these listed with photo's and script in the local papers or flyers and advertised on the internet. Then there are Auctions and mortgagee Auctions, tenders and private sales. Doesn't matter which you choose as long as the deal at the end is good and you are happy with the outcome.

How Much Should I Pay

Because this is to be rented out ideally you will want the tennant to cover all the rent payment's, this is called Positive Gearing and will be the best investment but the hardest to get. Probaly at this stage the only way you could purchase a property with positive gearing is to purchase at a very low price, like for example a forced sale or morgatgee sale and possibly a family sale. Another solution is to buy in a remote area, keeping in mind the rent will be less.

Negative Gearing is normally what happens in sought after areas as other landlords are purchasing there as well, hence supply and demand There can be a capital gain or more likely to be than in remote areas. In a nutshell if you have a rental property with negative gearing you are paying for the tennant to live there.

Happy hunting for that property..