They say it takes 10,000 hours to become an expert. But everyone has to start somewhere. You need continual learning, access to opportunities, perseverance when things aren’t easy, and a drive to achieve. That is what separates those who succeed from those who don’t.
Property investing and real estate require the same approach. When you strive to learn everything you can about investing in real estate – and by now I’m certain you realise that there is a LOT to learn about property investing – you increase chances of achieving success.
Then, the effect compounds – you become more comfortable, are able to trust your knowledge and can make better decisions.
Whether you’re new to property investing, or have a few properties under your belt, it can be a challenge to know what to buy and where to buy.
But once you understand the fundamentals of what makes a property worth purchasing, you improve your chances of meeting – or exceeding – your investment goals.
Below are the 13 questions which are fundamental to buying an investment property. Consider them tips for buying investment property – there is a lot more to it then just these points. These points also focus on residential property – but many of the same concepts could be applied to commercial property.
To be successful with property, you really need to get the necessary education and support from investment experts and specialists. That’s where we come in! If you’re looking to get started or do better with what you’ve got, grab a free seat to one of our Property Investor Nights.
1. Can I get a higher rental return than the average for the suburb?
You want to buy the property that has the best rentability. It may mean you need to spend a little bit more, but in the long term your property value is more likely to grow. Capital growth is always something to aim for. Plus, it may make things easier when it comes to selling the property.
2. Will this property have positive or negative cash flow?
Understand your cost of debt and expenses to have a clear picture of your cash flow. What is the overall cash flow position of all your investments? Make sure you have enough income to cover the outgoings together with a safety barrier. Don’t forget the hidden expenses. If your property is negative – where is the extra money coming from? Be mindful of interest rates, too.
3. What will be my “add value” rental strategy?
Furnished or unfurnished? Rent to students or professionals? Renovations? Raise the rents after 6 months to a year (market allowing)? You need to make some strategic decisions.
Make sure you look at what property market and trends are doing to understand what tenants want. Aim to make your property stand out from other rental properties in the area. Whether its a great location, a beautiful back yard, new bathroom, or high speed fibre-optic internet, as with any product you want to have a unique selling point.
4. What is the vacancy rate for the area?
Knowing how much competition you’re up against, or perhaps how little competition there is, can make all the difference to your rental income stream. Depending on the property it can be harder to maintain the necessary occupancy rate.
5. What is the availability of land?
How much free land is available in the area? If you are buying property in a well developed area, that land may be more likely to grow in value due to scarcity. Especially compared to a new area that has plenty of land available. Factor this into your purchase price.
6. If there are any large releases of land, what impact will this have on the market?
For example – if a landholder opens up their land to subdivision, or more blocks are released in various stages of a development, availability will increase and land values may potentially decrease or stagnate as a result. The law of supply and demand applies here.
7. What projects are planned and/or are currently taking place in terms of both residential and commercial efforts?
Buying into an area that is slated for growth can have a big impact on property prices, both for rents and values. Do your homework, look into local government approvals and see what the future has in store. Exploring the area and taking a look can give you clues – check for construction sites and cranes. Generally, the more the better providing its a positive for residents.
8. Are major retailers moving to the area or expanding their operations?
Growth in the local economy often results in more prospects for the community. Plus it adds convenience for tenants who need access to the essentials. Supermarkets, petrol stations, restaurants, schools, healthcare, dentists, retail stores, and bars, are all good to have close by.
9. What’s happening with transport in the area?
Be mindful of how people get to and from the property. People crave convenience in their commuting. A shortened commute time is a big draw card for anyone looking to buy or rent closer to work because it saves them invaluable time.
Public transport is also a massive bonus, too. Check the bus and train routes and see if the property you’re considering has any convenient access. But always be mindful of noise and pollution – so not too close if possible.
10. What are the current and projected population figures for the area?
A good rule of thumb is to find locations that are slated to grow. This will in turn influence demand for properties in the area and push house prices up.
11. What is the age bracket of the area?
Pay attention to who wants to live in the area because of its affordability or geographic attributes.
12. Who is your ‘Target Market’?
For example if you want to rent to families or those in a higher income bracket then choose an area that has facilities and characteristics that suit their lifestyle.
13. What property type suits your target market?
Keep in mind that different aged people with different living arrangements and stages of life will choose different property types. Buy properties which fit the demographics of the area. For example, generally young people want smaller properties with cheaper rent and less maintenance. While families might like a house with a nice back yard for the kids and close to schools.
Get some expert advice
From there it’s all about developing your knowledge and creating your investment strategy to achieve your goals safely and successfully.
If you haven’t attended one of our Property Investor Nights – now is the time. We are experienced property investors who know what works and what doesn’t.
We also offer a property investment education and property mentoring program. Our mentoring clients not only get the support of a team of property investors, but they benefit from being around like-minded people who are working towards similar goals. As well as access to an exclusive range of services that offer immense value.
Click below to grab your seat to a live event. Tickets are free – but the event is high value.
Attend a FREE Property Investor Night
We hold free information nights all around NZ every month.
It’s the best opportunity to gain some invaluable info, learn about our proven strategies, find out about market trends, and get free advice on your next best move.
On the night you’ll learn –
✔️ Start investing with what you already have
✔️ Where to buy for growth (and what to avoid)
✔️ Retire earlier with passive income
✔️ What types of property to buy for your goals
✔️ Learn to leverage your strengths with strategy
✔️ Ways to pay off your home faster – in 15 years
✔️ How you can make your pay go further
✔️ How to use your home equity to safely invest
6 Reasons to secure your free ticket –
It’s hard to sort through fact from fiction, so we’ve made it easy for you to work out your next step in your property investment journey.
Our property coaches are real world investors and qualified experts.
We’ve paid attention and know what works and what doesn’t over 20 years.
Our team stay up-to-date with the news and market changes, and implement real-life strategies for long term investment and financial sustainability.
This is a high value event. Your only investment is 2 hours of time to see what you can learn from our highly experienced team.
Whether you have 1 property or 10 this Property Investors Night will show you how you can take your property investing to the next level in any type of market conditions.
What will we cover on the night?
We cover a lot in just 2 hours – check the schedule for detailed info.
You’ll also have the chance to ask questions from the qualified property coach who will be presenting the Property Investment Night.
Afterwards, you have the chance to book in for a free What Can I Do Now meeting with your property coach. This is a one-on-one, nuts and bolts meeting where they take a look at your situation and advise you on what your next best move is to get started with investing.