Unfortunately most property novices don’t really understand how to assess which property to invest in or which area they should be investing in.
Worse still, they use Realestate.com as their research tool. This is very limited as a tool as it only shows you what is currently being sold and what has been sold in the past.
Why is this ineffective?
The fact that it only shows properties that have been sold, are for sale and are for rent doesn’t really tell you what is happening in an area that will make an investment grow in value. It doesn’t tell you what infrastructure has just been approved, shopping centers that are planned to go in, schools, road upgrades or anything like that an investor would need to know.
These are key elements that can help predict growth in the near future and as these infrastructure are put in place, they create a wave of growth in value.
Also, many developers and builders place misleading low priced property ads to attract calls. These are called leader ads and when you look into them further you find that the property is not complete and will cost many thousands in extra costs to put a tenant in.
This is where the novice investor is caught out on a regular basis, they don’t understand property contracts and what should be included in them.
Many Solicitors don’t understand these either as they are not property specialists, however buyers rely on them and this becomes costly.
Chasing the cheapest price is most often the most expensive in the end.
What do you look for?
Once the right area to invest has been found, you will see that the prices of what appears to be a similar property can vary by up to $50,000 in price, why? There are many reasons:
1) Quality of builder
2) Inclusions in package
3) Location of the Land
6) Shape of block
There are of course many other considerations the novice investor can get caught up in. Quite often price is one of them and they may end up with a property that is harder to rent and is of less value in the end.
Simple things like house layout can make all the difference to attracting tenants.
So always get professional advice on selecting an investment property, don’t chase the cheapest price, look for a quality investment at the right price.
I have seen buyers rejecting good advice thinking they were saving money by going and selecting their own property at a cheaper price after looking on Realestate.com or Domain and find out later that they have bought themselves a lot of challenges.
Always get good advice on property selection, don’t use Realestate.com or Domain as your sole research tools, you will need far more information than they provide.