Whether you are purchasing a home or investment property, good research is the key to success.
The last thing you want to do is make an offer on a property without being properly informed. Are you offering too much money? Is there another home on the market that is better suited to your needs? And do you know all the hidden costs of purchasing property?
To ensure you have the answers to these questions, here are my top five tips for property research.
1. Know your financial position
Before you even start researching the market, you need to know what you can afford. Speak with your lender or a mortgage broker to work out how much you can borrow.
When you are preparing your budget, factor in all the extra costs of purchasing a property, such as conveyancing, building and pest inspections, refinancing costs, stamp duty, strata fees and removalist costs.
After you add these costs up, you’ll have a realistic snapshot of what you can afford to purchase. This will help you narrow your focus in your property search.
2. Get to know the property market
Looking at the property market will give you an idea of what you can expect to pay for the type of property you wish to purchase in the area you are interested in. Here are some of the key aspects to look at.
Property values in your area
Start your search by looking at property price figures in the areas you wish to purchase in. Realestate.com.au has a handy and easy-to-use tool that provides property data for each suburb. You can access information such as annual growth, rental yield and median prices, and sort the results by units or houses.
Auction clearance rates
Higher clearance rates are generally indicative of greater demand for properties. This will help you decide how much bargaining power you have in the current climate. You will find these rates in local newspapers and on sites such as Domain.
If you are planning to purchase a property as an investment, vacancy rates can be a useful indicator of how easily you’ll be able to rent it out. In areas that have consistently low vacancy rates, it’s more likely that demand is high and you’ll get a greater rental yield.
3. Choose a property type and location
After you have done some market research, you will have an idea of what types of properties perform well in each area. This, along with your own personal requirements and budget, will help you determine what type of property to look for.
As well as deciding between a house, townhouse or unit, you’ll also need to think about specific details such as the number of bedrooms and extra features you may require.
If you are purchasing property as an investment, consider the rental yield for the property as well as its capital growth potential. Look for suburbs with steady capital growth and those that are near growth areas. Properties close to amenities such as schools, public transport and shopping centres can also be popular with tenants.
4. Start the property search
Once you have done all of the legwork, the property search process will feel less overwhelming, as you’ll know exactly what you are looking for. Look at online real estate sites for property listings, then make a calendar of inspection times and speak to as many real estate agents as possible.
CommBank partnered with realestate.com.au and RP Data to release a free property guide app that lets you make a shortlist of properties and access data on these. Apps like this are really useful for helping you to keep your information in one place.
5. Make an offer
It is useful to know what to expect prior to making an offer on a property.
Before making an offer, I recommend that you arrange a pest and building inspection and have the contract of sale checked by your solicitor. This will let you identify any issues before you are committed to the sale. And if the pest and building inspection identifies any defects, you’ll have more bargaining power.
Once you have made your offer and it has been accepted, you’ll need to sign the contract and pay the deposit. It is useful to know that until you have done this, the seller may accept a higher offer.
If your offer is accepted, the hard work is done. The only research that’s left to do then is what type of couch will look best in your new living room.
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