Making a strategic property purchase

Buying property is one of the most popular investments in Australia and is often the single biggest financial decision someone will make in their lifetime. But, when selecting a property many people go it alone and without any clear investment strategy which in the current economic times is risky business.

With fewer than 5 per cent of properties on the market at any given time identified as investment-grade quality, buyers must ensure they do research and avoid rushing to buy simply to gain a foothold in the marketplace.

Despite the shortage of quality stock there are opportunities in the market to secure properties that provide buyers with solid growth in value prospects. However, the fact remains that the average buyer is not equipped with the required information to interpret and understand the complex factors that can make or break an investment in the real estate market.

The house hunt can turn up more questions than answers, but by asking some simple questions buyers can avoid disaster and enjoy the exciting experience.

  • What is my budget and what area do I want to buy in?

Knowing the areas and types of property that fit your budget and objectives will assist you to filter your search and find the property that best fits your personal investment profile.

  • What is the historical performance of the property?

Historical growth trends can be a good indicator of the future capital growth prospects of a suburb and property, and can help you to determine whether or not it is a good long-term investment.

  • Is the property in close proximity to the ‘village’, transportation and recreational amenities?

Location remains the key to any sound real estate investment. A quality property is typically complemented by well-developed local infrastructure that is easily accessed via major road networks.

  • What is the property worth?

Comparing the property to other recent sales in the same area with similar attributes to the subject property is a worthwhile exercise to help you determine how much to pay. A professional valuation can also provide a more definitive answer to this question.

  • What is my strategy to securing this property?

The depth of information and research obtained will have a significant impact on your game plan and your ability to buy with confidence. Understand the rules of negotiation for both private sale and auction environments.

If all this seems too hard or you don’t have the time, engage a property advisor who can find, negotiate and buy an investment-grade property for you.

Greville Pabst FAPI FRICS CEO & Director, WBP Property Group