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Location and Property Type

 

Now remember that it is not an owner occupied home you are buying here, so the emotion can be somewhat removed.  However, it is good advice to stick to some basic fundamentals like, ‘what type of tenant do I want to attract?’  As an example, the needs of a family will be very different to that of a professional couple.

 
Location will remain important as it will drive capital gains and ability to attract tenants.  Try to think like a tenant, if you were renting what would you be looking for in a rental property?

Be aware of guaranteed returns  Some new investment developments offer a guaranteed rental return for a set period, while this may look appealing on the face, it is advisable to look beyond the initial guarantee and ask yourself what you could rent the property out for when the guarantee expires.

When buying a property, shop, shop, shop and then shop some more!  You can’t look around enough when you are buying an investment property.

There is an old saying that often you make your money when you buy not sell …

Make sure a property has the infrastructure around it tenants will want/need, such as schools, transport, medical, shopping, social, sports clubs, etc.

What is the weather like in the area?  Does the house get good sun late in the day or early, is it wind blown?

Ask questions.  Why is the current owner selling, is there an undesirable neighbour next door or have they just grown too big for the house?  Is it currently a rental property?  If so will the tenants be staying on and for how long?  Will the current property manager be a good option for you to continue on with?
Is the Rateable Valuation relevant?  Often this is not the case as the Rateable Valuation is only a snap shot at a set point in time and is the figure that drives the rates payable on the house, it does not mean it is still worth that figure.

What have similar properties in the area been going for?  Shop around, ask your real estate agent.  How much did this house sell for previously?  For further reports and information we can refer you to a professional valuer.

Often recent improvements to a property look great, but make sure you check out to see if the improvements had council consent.  You can do this by having a (LIM) Land Information Memorandum report done; generally this is done by your solicitor.  A LIM report shows consents and codes of compliance, rates owing, any problems with drainage, flooding or erosion.  You can also obtain a short LIM report from your local council at minimal cost.
 
You should also get the certificate of title checked out.  You need to understand the different ownership types that exist from freehold, to cross lease, unit title, company share or leasehold.  The certificate of title will also highlight any covenants (restrictions) or easements (rights) on the property.  Our advice is to always consult a solicitor in the matter of title.
 
Remember that it is not an owner occupied home you are buying here, so the emotion can be somewhat removed





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