It's not easy to find the great properties you can make money on. It takes effort to find that below market diamond, that you can make shine. But it is worth it when you do. Here's some tips on how to find them:
Numbers, Numbers Numbers
Being an investor you have to buy with your calculator and put your heart to bed. Data is where it is at! You have to do a lot of analysis to make sure you are buying the right property. You need to really study the local median sale price - over time. This will give you an idea of where the suburb is likely to go. Try and glean as much info as possible about:
- Capital Growth
- Time to sell properties
- Median weekly rents and rental yield.
Get Rid of it!
You need vendors to be very motivated to sell to bag the bargains. By understanding what is motivating them to sell, you can gauge how motivated they really are and how much you will be able to negotiate. Some possible reasons for selling fast are:
- divorce
- a loss of job
- a move out of state
If you know the reason, then make sure you stick around after the open home (if there is one) and speak to the agent privately. If you offer a good deal, in return for a quick sale, you up your chances of getting a property for under the value.
A bit of Elbow Grease and a Bit of Paint
Yup the chances are very high that you're going to have to put some (or a lot) or work into the place. If the property looks a little tired and unloved, there won't be as much competition for the place (unless there are other investors with their eye on it too). Make sure you fully factor in costs of repairs and renovations when you are running your numbers to see if it truly is a bargain. Many investors get caught out when the rehabilitation costs get out of control.
Look to the future
You can snap up a bargain if you are fully versed in where the area is headed.
If the area is scheduled for developments like - train lines and shopping centers, then along with those are likely to be big grassy areas. All things that appeal to renters. Therefore, if you know your stuff, buying before the development goes ahead may in fact see you sitting pretty after the development has been competed. But, you really have to know your stuff with this strategy!
Going Once, Going Twice…
Houses that are passed in at auction can sometimes turn into a goldmine. If the property has been over-quoted and it ends up staying on the market for months, then it will be easier to negotiate with the vendors.
It takes some work and forethought to find the good properties. Do you have any trick that you are planning on pulling out in 2013 to bag a few bargains of your own?
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