Hi all,
Long time reader, not a big poster.
I'm a young lad going into my first property which will be an IP (what a surprise!) & I unfortunately don't have anybody guiding me through the process. So far I've inspected a few properties and finally found one that I'm interested in, I haven't given the RA too many signs that I'm interested as I fear this will push the price up. I'm all a little confused as to when I should be getting the property inspected or when I should be contacting a conveyancer? Is anybody able to recommend a somewhat thorough but simple website/listing that may outline the process as I clearly don't want to give the RA too much of the idea that I have no idea what I'm doing (experience wise, if not done already!). Also, Are there any recommendations of conveyancers in the north west suburbs of Melbourne?
Thanks!
Adam
Wobblycart's advise is always good, but you still need to do some homework yourself.
First thing is to work out what you can afford. Do not past Go, do not collect $200 unless you do this. Otherwise you're just dreaming. Talk with a broker and get the finance arranged.
Next is to work out the
market value of the property. Completely ignore the asking price. Market value often has no correlation to the asking price. Don't base your offers on the asking price, the asking price is the vendor dreaming. Work out the market value by looking at recent sales around the area to comparable properties. Search the web. Ask the RE agent and other agents in the area because they actually have a good idea of what's going on. Work out market rent the same way. Find out the vacancy, council rates, water rates and strata fees (particularly strata fees if a unit, villa or townhouse) as these will affect the yield. Work out the recent capital and rent growth for the area. Some of this info is in the back of the property magazines, some is in the property listing, some in the contract of sale, and some you'll need to phone the agent for. These price and rent growth figures give you an idea what might happen in the near future which will affect your investment return.
Once you have an estimate of the market value and yield, work out what you're prepared to pay for the property
to make the investment work. You need a MAXIMUM bid that you won't go over.
Got your maximum bid? Phone the agent, make your first bid lower than the max, wait for the response from the vendor. If not accepted then raise the bid, rinse and repeat until the maximum is reached or you've bought the property. Easy as, bro.
If you didn't buy the property, either look for another or raise your maximum. If you raise your max you're now over-paying for the property (based on your earlier calculations). There are lots of properties out there, don't feel like you have to buy THIS one. A trap for young players, that is.
I've never understood the "I haven't given the RA too many signs that I'm interested as I fear this will push the price up" attitude. The RA doesn't have voodoo dolls that they manipulate buyers with. It's a simple yes/no transaction, only you have to be prepared for a LOT of no answers. The fact that you've only found ONE property that you're interested in suggests that you're getting emotional with the purchase. That's fine if you want to buy a property you
like, but not if you want to buy a
good investment.
Every week you should be analysing several properties and making a couple offers, and be doing this for several months before you buy. There are lots of nice properties on the market that are bad investments.
Actually there is a Zero-th thing you need to do (ie, something before Step 1) and that's to decide whether property investment is the right thing for you at the current time. Depending on where you intend to buy or what your overall investment strategy plan is, residential property might not be a good thing to invest in.
Opinion only, not investment advice, ymmv.
