Expert Advice by Paul Wilson
How To Overcome Those Property Investment Buying Jitters
Property investment is considered to be one of the surest long term ways to build wealth. People spend years getting a deposit together for their first investment property either in terms of building equity in their house or saving the cash.
At the same time a person is gaining their education regarding property investing and the strategies that are on offer in the industry.
The mere fact that property investing is new to them can at times make it hard for an investor to take the plunge and buy their first property. This need not be the case if they have undertaken sufficient education and have gathered together some experienced advisors around them.
New Investors Often Suffer From Analysis Paralysis
Analysis paralysis is when an investor has collected pages and pages of information, sometimes views hundreds of properties, but still cannot make themselves take the plunge and go to contract.
Several reasons that investors suffer from this state of mind is that they “cannot make up their mind because they have looked at so many properties” or they “don’t have the confidence” and cannot put their finger on why.
Clear Focus Helps Make Buying Decisions
When an investor has been able to define their buying criteria they can then short list properties to suit their needs. When you’re able to do this then you don’t need to be looking at ‘hundreds’ of properties, properties that don’t fit within your buying criteria.
Steps To Take To Get Focus
- Talk to an experienced property consultant to help formulate clear goals about what you want to achieve from your investing. If you know your purpose then every step you take from planning right through to buying the right property needs to be in-line with your ultimate purpose.
- Talk to your accountant and discuss the best buying entity and discuss the tax advantages of buying property
- Understand your finance position – how much deposit you have, how much of a loan you can carry?
- Decide on a buying budget. The amount you are willing to spend may vary depending on the type of property you buy. E.G you may be willing to spend $750K on a block of 4 x 2br units but only $240K on a single title single income property. The return on investment for each property will also influence your budget and the amount of debt that you can service.
- Within your set price range identify suitable locations.
- Write up your buying criteria which includes such things as:
- A house or an apartment
- Long term rental or short term rental (holiday accommodation)
- How many bedrooms
- Size of property
- Schools nearby
- On transport route
- Shops nearby, and so on
- What type of tenants do you want: singles, family, business couples – although you cannot advertise for a certain type of tenant you can often buy a property that suits your tenant type
- Once you have written down all your answers and decided which area you want to buy in, because it fits within your criteria, only look in that area for property, get to know the prices in that area and what you will get for your dollar – narrow the area right down to just one suburb and then sit and wait for the right property to come on the market
- As part of your selection process for suitable locations and again after you go under contract to buy a property interview several property managers. Property managers are a great source of local knowledge and are often generous about sharing this with buyers. Upon making a decision who would be most suitable to manage your property, work hard at building up a relationship with the property manager. I tell all my clients that it’s their job to manage the property manager and let their property manager - manage the property and the tenants.
By taking these steps you will feel in control of the situation rather than the situation taking control of you.
By narrowing down the area in which to purchase, you will be able to focus and get the in depth knowledge you need on that area and by doing that you will know when a property is priced right and you will understand the driving forces that will work to make your purchase a viable investment.
The better you understand your “investing purpose” and how individual properties contribute to your bigger vision for your portfolio, you will buy more properties, have greater success and make confident decisions on the facts. Investing with this level of confidence will reduce any of your uncertainty jitters. a real drive Now you can wait for ‘your property’ feeling confident that you know exactly what you are looking for and the price you should pay.
Paul Wilson is an Independent Property Investing Expert and the founder of We Find Houses, Educating Property Investors & We Find Finance. Paul has been educating and coaching investors since 2001. Paul provides valuable, independent guidance and support by teaching strategies on how you can invest successfully while protecting yourself from commission hungry sales agents and property spruikers. Protect yourself with knowledge, contact Paul today for a complimentary consultation on 1800 600 890 or email firstname.lastname@example.org
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.