When you’re buying a property, careful research is the key to buying the right property. 

From making the initial decision about how much you can afford to spend, right down to locating the right property and making your purchase, doing your research to make sure you’re fully informed will help to ensure you make a profitable investment that will be a real financial asset for you now and into the future.

But where do you start?

In this blog we briefly outline the research steps you need to take.

STEP 1 – FINANCIAL RESEARCH

The first step in buying a property is setting your budget and organising financial approval for a home loan. 

Researching how much you can afford to spend is as simple as listing all of your assets – including the cash you may have on hand for a deposit – and working out your expenses.

This will show you how much you can afford to spend on a deposit and home loan repayments.

Once you’ve completed this basic research of your financial position and decided your budget, it’s time to talk to your local mortgage broker.

They will sit down with you to discuss your financial position, your goals for the future and then help you choose a mortgage product that’s right for you.

They will then research the home loan market for you and select the loan options that best suit your objectives and give you the best rate.

STEP 2 – WHAT TYPE OF PROPERTY DO YOU WANT TO BUY?

Once you have your budget firmly in mind, it’s time to decide what type of property you can purchase.

Obviously the amount of money you have to spend will influence what type of property you look at purchasing, but there’s a lengthy list of options and you need to do some research to help you choose the one that’s right for you.

Are you interested in buying an apartment, a unit, a house or perhaps a commercial property?

If you are purchasing the property as your own home the decision will be influenced by your personal needs.

But if you are purchasing the property as an investment, then you may consider all property types as suitable – as long as they give you the return on your investment that you need for it to be financially viable and profitable.

STEP 3 – WHERE DO YOU WANT TO INVEST?

If you’re buying a property as your own home, this step will be about researching a suburb that best suits your personal lifestyle and the future needs of your family.

But if you’re buying an investment property, it pays to look further afield and consider the locations that have good capital growth potential and will give you the best return on your investment.

Savvy investors spend time researching to find areas with capital growth potential and then focus on finding properties in these areas that are within budget.

This requires access to good property market data that gives you figures on the latest trends.

Research suburbs that are showing steady capital growth, and suburbs adjacent to ones that are already popular.

Don’t be afraid to consider properties in other capital cities that may have better capital growth potential than the city in which you live.

If you are buying an investment property, consider locations that will be popular with tenants – suburbs with good schools, public transport links, shopping centres, amenities and access to the CBD.

STEP 4 – LOCATE THE PROPERTY AND RESEARCH ITS VIABILITY

Once you have an idea of your budget, the type of property you want to buy and general locations you may want to invest in, you can start researching to find suitable properties to inspect.

If you’re purchasing an investment, you will need to research each property very thoroughly before you decide on one to purchase.

First you’ll need to determine the right price for the property so that you don’t pay too much.

You can do this by researching the sale prices of comparable homes in the area to see how yours stacks up. 

Next you’ll need to do some research with real estate agents to determine what kind of rental return you can expect on the property you have chosen.

It’s important to determine whether or not the rental return will cover all the expenses – including the mortgage – so that you can work out if it is a financially viable investment for you and suits your budget and investment goals.

Also don’t forget that there can be addition costs with some properties like body corporate fees and with investment properties. Things like a property manager or property management software.

Not many people know that there are GREAT Online Property Management Platforms like RealRenta, that does or can arrange for you anything and everything that a property manager does, but at a lot cheaper rate. This can help your bottom line.

Or lern more about self-managing your investment property