Buying your first home or investment property is exciting! Like planning for a holiday, you start researching about the fun things you want to do. Out of excitement, you also start looking up other activities not in the original plan, instead of researching the basics, like accommodation and transportation options. Buying a property is the same, it requires the same level of commitment towards research. But where to start? We’ve put together the essential steps you should include in your property research checklist so you have the perfect property hunting adventure this year!
- Research your borrowing powerThis first step is as easy as picking up the phone and making an appointment with us! As your mortgage broker, we’ll help you determine your borrowing power and give you a clear understanding of how much you can realistically afford to spend on your new property. In this process, we’ll get to know you financially. Having an accurate idea of your borrowing power will help ensure that you’re looking in the right price range from the very start.
- Research the criteria for your desired propertyIt’ll be easier to research the property that you’re looking for when you have a set of criteria. With a lot of quality properties to choose from, it’s easy to fall in love with aesthetics, so it’s important to make sure that the property meets your requirements. Here are some useful questions to ask yourself when listing down your set of criteria.
- What is your main purpose or reason for buying a property?
- How long do you plan on staying in the property?
- Do you have a budget for ongoing repairs and maintenance?
- Who would potentially rent your property or buy it when you decide to sell?
- Research the suburb and the surrounding areaSo, where do you plan to buy? Whether you’re a home buyer or an investor, the aim is to purchase in a suburb with solid capital growth potential. It’s also better to buy in a suburb where it’s in its early stages of growth, rather than at the peak of a growth cycle. The surrounding area is also worth looking into. Get to know the local transportation situation, as well as local facilities located at a walking distance or just a short drive away. We can provide comprehensive market reports, so please reach out to us if this would be helpful for your research.
- Research the propertyWhen inspecting the property, check both the inside and outside conditions. Here are some items to include in your checklist.
- Check the ceilings for water stains and the cornices for waviness – indications of water leaks.
- If there are carpets, check the situation underneath – if there’s cement or floorboards.
- Be mindful of the evenness of the floor.
- Get in touch with us, your mortgage broker, for referrals on building and pest inspections.
- Check for cracks in the brickwork.
- Check for mildew in the eaves.
- Be mindful of cracks in the driveway.
- Research the priceIt’s best to compare prices with other recent property sales in the same location to make sure that you’re getting a reasonable deal. There are a lot of online resources for this, where you can research property sales in a specific location, and you could compare with other properties with comparable conditions and land size. Don’t forget to also include ongoing costs in your budget. Research the ongoing costs that will be applicable to your desired property, such as council rates, strata fees, and water costs.
- Research the rental yield
Consider the average rental yield of the area and the property. This means finding out the potential rental income. If there’s a strong demand in the area, the rental yield may be higher. On the other hand, if there’s a high vacancy rate, the rental yield may decline. There are useful online resources where you can access market reports on specific areas. The data include details about median prices, growth rates, and rental yields. This part can get technical, but you can ask us for a property report and we’ll gladly explain the details to you.
- Research the historyYou may want to get to know the property a little bit more by researching its history. You can trace the history of a property through online archives, street directories, council rate books, and Title Office records. It’s also important to know if the area or property has been flooded before, as this can greatly affect the property’s resale value.
- Research the professionals you’ll needMake sure to consult with reliable professionals (like us) who can give you advice that’s useful in your property hunting journey. We can give you referrals and you can also do additional research. Best practice is to ask for recommendations from friends and family based on their experience with that service provider. You can also check reviews and testimonials.
We can’t stress enough the importance of doing plenty of research before purchasing a house or an investment property, but we guarantee that the effort will be well worth it in the long run. And of course, we are here to help you every step of the way!