Investment planning and property research

Real estate investing success

6 steps to property buying success: the essential guide for home buyers and property investors

Using a buyer’s agent is a good start in reducing stress when buying a property. Our Buyers Agent Guide series 6 steps to property buying success makes understanding and completing the transaction even easier.

In this article, the first of the series, we provide practical and straightforward guidance for buyers in a simple ‘how to’ for planning and researching your home or investment property. Designed for easy reading and laid out in a simple-to-follow format, we encourage you to complete the included exercises as you go.

Part 1: Investment planning and property research

Put the horse before the cart

A home is the biggest investment most people will make in life. That said, the hefty financial commitment isn’t the only reason buyers struggle with finding and purchasing the right property. Every buyer has a unique set of needs that must be met, and to complicate things further, every home must be judged on its unique combination of quirks and perks. The only way to avoid disappointment and find the right match is to invest time in research. The most successful property investors do their homework and do it thoroughly.

What are your personal property investment goals?

Before you start to research suburbs, amenities or other external factors a little self-reflection is in order.

1.1 Buyer profile

First, identify yourself. Which type of property buyer are you?

Buyers Agent Guide: property buying investment research

It’s important to clearly define the type of investor you are – each group has specific needs and your buyer’s agent will tailor their assistance to reflect these. If you’re reading this guide, you probably fall into one of the residential property categories.

1.2 Property buying power

How much can you afford to spend? There are a plethora of budgeting tools and online calculators available to help you determine the amount you can borrow and the ongoing costs of maintaining your property.

Our pick for assistance with preparing a budget and understanding ongoing costs is the Buyers Agent Guide comprehensive property budget planner, available as a free download. The paid software program Real Estate Investar has also received positive reviews. We recommend discussing loan options with an independent mortgage broker, but before you reach this stage you can visit any lender’s website to access a simple online calculator. This can be used to get a rough estimate of mortgage repayments.

1.3 The ideal home or property investment

Now for the fun part. You’ve probably already thought about some of the things you want in your new property.

For residential buyers, the number of bedrooms, size of the kitchen and whether you want a verandah are fairly easy questions to answer. Dig a little deeper and build a rich description of what you are looking for. Useful tricks to help with this include:

  • Write the property advertisement you want to see.
  • Put it on paper to make it real.
  • If you are looking for a place to live or relocate your business, make a list of all the things you love and hate about your current situation.

Residential and commercial investors should also carefully consider the characteristics of the property they would like to purchase.

Once you have something concrete to aspire to, the next step is to prioritise each item on your list of requirements and understand what you are willing to compromise on. A property purchased for investment purposes has the advantage of greater flexibility for the buyer, as they are usually willing to make more concessions when it comes to turning the dream into reality.

If the ideal property doesn’t match your buying power think about whether you are willing to renovate to achieve your goals and whether this is a more financially viable option.

1.4 Where to look for your home or investment property

Armed with a clear vision of the property you hope to buy, it is time for the search to begin in earnest. Savvy investors balance the characteristics of a location with its potential for growth. In addition to listing which services and amenities are important to you, look for your new property in areas that have a promising history of sales and tenancy performance. Plans for improved infrastructure, commercial investment and property zoning are good indicators of a suburb’s potential. You can usually get this information from the local council.

With a large amount of suburb data and online resources available, it is easy for buyers to become bogged down or suffer from information overload. An independent buyer’s agent is well placed to support you in choosing a value for money location.

If considering purchasing a property outside your current state, don’t forget to get an understanding of the different duties that may apply and check your eligibility for any available rebates. State and territory governments list this information on their websites.

1.5 The crystal ball

While it’s impossible to predict some factors that may influence your decision to buy or sell a property, a transaction of this size is generally a milestone event planned years in advance. Think about your expectations for family, work and lifestyle changes in the coming years and how these will influence the length of time you are likely to hold the property. A buyer who hopes to upgrade in a few years will have very different needs to those who are looking for a long term family home. Both scenarios can deliver a good return on investment if adequately planned for.

Coming up on the Buyers Agent Guide Blog…

In part two of our series 6 steps to property buying success, buyers will find a free property budget planner available for download as well as discussion on some of the often overlooked financial implications of buying a home or investment property.

About the Author: Kristin is a freelance writer and property investor from Brisbane, Australia. You can view Kristin's other projects or contact her at LinkedIn or Google+. If you have any topics that you would like to see covered on this blog, please email blog at buyersagentguide.com.au

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