One of the keys of being a successful property investor is getting to the property before the competition and getting the property under market value. But how do you do that - how do you avoid being fleeced?
Well it comes down to planning.
Numbers
You need to do lots and lots of research! The numbers don't lie and you need to have accurate historical data to make informed decisions. Some (but not all) of the areas you need to cover in your research are:
- Median price in the suburb that you are investigating - past 12 months, 5 years and 10 years
- Track property sales in the targeted suburb. Which ones are going to auction, which are being passed in. Ask for price guides from agents. (Keep a closer eye on comparable properties)
- When you are looking at a particular property, find out what it last sold for, when and how long it stayed on the market.
Consider a buyers agent
They are on your side, they are trying to get the best deal and they take the emotion out of it all. Send the agent to auctions to ensure you don't get caught up in the excitement and go above your budget. They will also be an expert in the areas that you are looking at, and from their experience they will be able to give you a general idea of what a property is worth.
Offers
Sometimes it might behoove you to put in an offer before a property goes to auction (if that is where it is headed). Some vendors may want to skip the auction stress altogether and jump on your offer. Also, have a good negotiation strategy - not offering your top dollar first off is a good move.
Know when to walk away
There is always going to be another property around the corner. So if you miss out on one because it has gone over your budget, don't worry another one is on it's way. Plus, you never know, the vendor may not be able to sell their place for their asking price and may get back in touch.
Here are a few resources for information on property numbers and other investing information.
Online Magazines
So are their other ways that you use to make sure that you don't pay too much?
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