When starting out as a property investor a lack of knowledge can lead to costly mistakes. There is so much conflicting information out there that it is easy for a new investor to become confused and end up making the wrong decisions.
Follow these 5 simple tips for finding the perfect property and you’ll be on your way to success as property investor.
Choose the Right Property Type
If you want to enter the buy-to-let market, flats generally make the best investments. Your investment budget would obviously be the main factor, but if you can afford it, choose a two bedroom flat over a one bedroom. If you can stretch your budget a bit further, a second bathroom is great to have too. The idea is to choose a property that would appeal to a number of different tenants. A two bedroom flat would appeal to small families, sharers and single tenants who need either a spare guest room or a home office.
Choose the Right Location
Location is still the main consideration when buying a property, whether it’s for yourself or as an investment. Yes, there is a high demand for rental properties pretty much everywhere, but buying in the right location will get you maximum return on your investment and attract the right type of tenant.
Get your finances organised early
You want to be able to move quickly when you find the right property so that you don’t lose out to the competition. If you don’t have the cash, you will need to get pre-approved for finance. This would put you in a stronger negotiating position. Applying for finance early on, will also make you aware of what you can afford to spend.
Know Your Long Term Goals
If you’re looking for a quick return on your investment, look for properties in up and coming areas with a high growth rate. For longer term investment, the established areas may suit you better. In Johannesburg, for instance, the areas in an around Sandton appeal to a variety different people looking to rent and demand is always high. Having months when your property is not let will be kept to a minimum, making them a great option for rental properties.
Find Motivated Sellers
A motivated seller is one who needs to sell, and sell quickly. A property owner who is no hurry to sell can afford to wait around for a great offer to come along. A motivated seller will be more likely to accept what they think is a fair price for their property as soon as it comes in.
Getting yourself prepared by taking care of finances, learning the demographics of your location as well as the price ranges, understanding your prospective tenant’s requirements then meeting them, all add up to a painless and rewarding buy-to-let experience.