What You Need to Know About Buying Property
By Greville Pabst, WBP Property Group
For most people buying property is the single biggest financial decision they will make in their lifetime.
While buying a home is a rite of passage for most Australians, many people go it alone and without any clear investment strategy. Having an investment strategy can help you find the property that suits your needs and budget and can save you time and money -and protectsyou from unnecessary risk.
As the property market heats up buyers need to be prepared. So, here are my top tips for buying property this summer:
- Set your goals: Whether you are buying an investment property or a home you need to set clear goals and think about the desired outcome of the purchase. Are you buying for capital growth or income yield? If you are buying for investment purposes make sure you're aware of the non-recoverable outgoings versus the potential returns. Your short- and long-term goals will depend on a number of factors including your age and appetite for risk.
- Be organised: Prior to commencing your search, ensure you have your finances sorted as credit can be much harder to obtain than in the past, with deposit requirements increasing and longer approval times. This will help you to determine the properties that are within your budget, which can save you time and from disappointment. If you're buying at auction without preapproval ensure the contract is subject to finance.
- Do your research: Prior to selecting a house or area in which to buy, do you own investigating. Look at a suburbs growth history, recent comparable property sales and what facilities it is has to offer, most of which can be found via a quick search on the internet.
- Select the right property: When choosing a property there are a number of ways to maximise your investment. Buy the worst house in the best street in the suburband look at land size with development angles. Think like a developer; land value can comprise up to 70 per cent of the value of a property and is an important factor in determining capital growth. Also, when buying for investment purposes avoid purchasing property well above a suburbs median price. The median price represents the general level of affordability for the majority of buyers and renters, giving your property wider marketability.
- Location: Choose property located within close proximity to amenities such as shopping strips and centres, schools and parks, restaurants and entertainment facilities. Remember, properties located within walking distance to these facilities will attract a premium price. Also, look at transportation and access options to determine if the location meets your needs.
- Seek professional advice: Why risk a guess? Before making an offer on a property it can be beneficial to have your solicitor review the Contract of Sale. The contract will reveal the land size, easements and any building covenants, all of which your solicitor is trained to identify. It is also a wise idea to seek advice from a property professional that is not directly involved in the transaction.