Basic rules for buying

Basic Rules
They say that the basic rules for residential property investment include the following:

  • Research - Research and research. Arm yourself with all the information that you are going to require.

  • Analyse - Analyse and analyse. Complete the necessary analysis rather than buying based on emotion. You are now in business so make sure you know the rate of return you can get from a property and the valuations of those properties.

  • Location - Location, location, location. Make sure you find the right location.

  • Timing - Timing Timing Timing. Watch your timing. This point is arguably the most important of all. You may have done great research, analysed the market trends, found a top location - yet buy at the wrong time in the market. The result - Disaster! The right location is important but the right timing is everything. 

  • Manage - Manage and manage. Look after your tenants and look after the property.  

Things To Consider When Buying
Here are some important points to consider when buying a property:

  • Be clear on the vendor’s price.
    Make sure you know exactly the vendors price and expectations before becoming involved in the property.

  • Work with a good salesperson.
    Find a sales agent that you are comfortable with and let them work for you in bringing up the buying options. If you have a good relationship with an agent, their advice will benefit you as you make more and more purchases.

  • Work with a good mortgage broker.
    A good broker will have access to the banks and financial institutions and can direct you to the best deal. This can save you a lot of time and effort as well as a lot of money, over the various properties that you will add onto your portfolio.

  • Watch government valuations.
    Government valuations are only a guide, but they don’t reflect what the market value is for properties. They will provide you with a benchmark but do not take them seriously.

  • Make sure you make a good offer.
    A good offer to an owner, where the conditions involved are few, will most likely have a better change of succeeding. Nevertheless you need to protect yourself so consider some of the following conditions that need to go into an agreement:

    • That is subject to finance.
    • That is subject to sale of another property.
    • That is subject to solicitors approval and agreement including title search.
    • That is subject to a full builders report.
    • That is subject to a valuation.
    • That is subject to a Land and Information Memorandum including compliance with local authority requirements.

If you work with a good real estate agent, buying a property should not be a great problem. Although the agent represents the seller, they still have a responsibility and must disclose any information required to influence your buying decision.

That is, they cannot withhold information or misrepresent any details of the deals, or act in a fraudulent matter.

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