With the current economy it can feel like an up-hill battle for property investors, but it is still possible to make money - with the right information. By avoiding common mistakes you will set yourself on the right path to a healthy return down the road. One simple way to achieve this is by being thoroughly informed. Make sure you are asking all the necessary questions before you invest in a property.
Here is a list of 10 important questions every investor should ask.
1) What is the demographic make up of the area I am considering investing in?
It is important to be aware of the demographic of the area. You need to reach a target market with the right property; it is imperative you know the demographic.
2) What are the local council’s plans for development in the future?
Knowing the councils future plans will inform you of any major construction that will occur in the neighborhood. For example, you wouldn’t want to buy a house that is soon to be blocked by a sky-rise apartment; nor would you want a prison to be built near by. There are positives though, you can also find out if any schools or shopping complexes will be built in the near future and these are great selling points.
3) What Is The Size of The Land?
For a property investor, it’s all about future options. Knowing the land size will give a general idea of future subdivision, development or expansion. You want as much land for your dollar as you can get.
4) Am I buying in a heritage zone?
Be wary of any purchase that has the word ‘heritage’ surrounding it. Every decision you make for a historically protected building has to be approved by the council, this makes for a poor investment. Unless you are wanting to restore a building for your own satisfaction, stay away from these deals.
5) Does the property flood?
Knowing whether the property floods is important. Flooding causes damages to land and structures and that can mean costly repairs. Flood zones are also particularly difficult to sell and tenant within. Although it may be dry in summer, the same may not apply during the winter months.
6) How far is the property from public transport?
Most demographics like to have easy access to public transport. Knowing the distance between the property and bus stops etc, will prove to be a great selling point whether you are selling or tenanting the property.
7) How far is the property from Schools and Hospitals?
If you are aiming your property at families, this is important information. Most people will move to region just to be close to a preferred school - so use this to your advantage. Buying near a school with a bad reputation should be avoided.
8) What is the current rental income of the property?
Check whether the current rent is below market, at market, or above market rents.
9) What did the current owners pay for the property?
Having these figures will put you in a better position to negotiate the price. If the seller isn’t forthcoming, do your research. The council may be able to help.
10) What is new in the house and what must be replaced?
Knowing what work needs to be done will help with your estimation of repair costs, don’t rely solely on the vendors account and always pay for a house inspection before purchase.