Five tips to take on board before you bid …
With property prices at an all-time high and with no certainty as to when it will slowdown, investors have flooded the market looking for a piece of the action. Whether you’re renovating or simply buying to let, there are a few simple rules could save you a lot of cash and heartache on the way to your investment dream.
1. Don’t overpay
Make sure that you pay what the property is worth the land and what’s on it. Use suburb data tools to work out the market price and the outlook for a long-term investment return.
What have other houses in the street sold for lately, what is the agent’s opinion of a sale price down the track or post-renovation? Don’t assume you’ll make money, make your estimate based on the property losing 5% of value.
2. Do a structural check
Ask a building inspector or qualified builder to check the property for any water damage, termites, the condition of the roof and guttering and whether there’s any asbestos lurking – that requires specialist and costly removal. A complete survey of the land may also be worthwhile, especially if you’re changing the layout/building on the land.
3. Renovation rules
If you’re planning to renovate, do up a budget of all the costs you’ll incur, including contracted services, materials, council approvals, cost of delays, etc. Lining up all these costs, will it add solid value to the property and cover your purchase costs? Also, renovate in a way that is consistent with the area and appeals to a mid-market buyer rather than overspending on top-end fittings that will be lost on potential buyers.
4. Beware of Bargains
If something is cheap, there’s usually a good reason for it. If it’s located next to a bus depot or huge power lines, it’s going to impact your re-sale value or banks may not lend to you in the first place. But, you also need to look out for the things you can’t see like sewage pipes running underneath the property or how the property is “zoned”. If the property is zoned as anything but residential, you’ll struggle to renovate and could be up for a battle with the local council.
5. Make sure you’re insured
If you’re planning to rent out your investment property, make sure you get landlord insurance. It will protect you from lost rental income in case of needing to do major repairs on the property which forces the tenants to vacate.
Please contact Steve, David or Mitch Cleary at Allan Hall Finance to discuss the best finance solutions for your investment loans. To speak to them directly, please call Steve – 0416 530 584, David – 0425 323 023 Or Mitch – 0412 038 205.
Article Source : www.propertyobserver.com.au