PROPERTY NEWS - It is that time of year when people start thinking about buying property, perhaps their first home or maybe an upgrade or downgrade.
With the economy as tight as a tightrope right now, money really matters and thinking carefully about what, where and for how much you want to buy, is now more important than ever.
Investing in property is the single biggest financial transaction that you will ever conclude and should always be done with great care. There’s more to consider than you think. For starters, property is an active, rather than a passive investment and comes with financial risk.
Although, buying your own home should first and foremost be about securing your future and creating a foundation upon which to build a life and future for yourself and your family, you should also make sure that you are a making a sound investment.
Do your homework
Whether it is your primary home or a second property such as a rental or land in a new developing area, you should always do your homework thoroughly to mitigate the risk.
Consider the downside upfront. When the market turns for example, you might find yourself in a tight financial spot and you have to sell. Think about this when you buy: how hard will it be to sell the property if it comes down to it?
Consider whether you have the time and financial means for this type of investment. If you are purely looking for an investment, then a property fund might be the better choice, especially if you are a novice or first time buyer.
Once you have decided that you are going to take the step and invest in bricks and mortar, be sure to keep these eight golden rules in mind:
- Location, location, location – this old adage will always be the primary driver of demand, prices and property values. Research, research, research. Before you sign on the dotted line, chat to local area agents and get the vital statistics and information about the area.
- Pay a fair price - do not pay more than fair market value unless you are sure that you are financially secure enough to hold onto the property until it starts to accumulate value. Price growth tends to track economic growth quite closely, so if the economy stalls, so do prices.
- Neighbourhood – do a thorough due diligence on the neighbourhood and area, especially if you are not familiar with it. Make sure that it is a viable area, more so if you are looking at a second or investment property. Ensure there are good services, roads and communications connectivity for aspects such as internet and satellite television for example.
