While many property investors, who have been growing their portfolios through auctions, Tom Panos, who has spent years as an auctioneer and an investor, believe that investors could still find a way to move their property investment further forward even though they have yet to find good luck at auctions.
According to him, as a property investor, there are only three basic rules that he always tries to follow. His first priority when buying a property is to conduct a formal inspection and make sure that he is getting a good quality investment.
“If I’m [buying] a property, I always go off and get a formal pest and building inspection. I’ll get a walk-through inspection—I’ll pay someone, like a builder, a lower amount of money, but I’ll walk me through the property together, and all I want to do is look at basic fundamentals. That’s the first thing,” he said.
Secondly, Tom invests on the “house-hunting journey” as much as he invests on property.
The property investor explained: “I factor that I’m going to spend a little bit of money in the house-hunting journey. That money is not a cost—it’s an investment. I actually understand that I’m going to invest money… to actually buy a property, but it’s going to buy me a better property. I’ll get the value of that property in the years to come.”
Lastly and quite ironically for an auctioneer, he said that he actively tries to avoid auction properties altogether.
“In a hot market, I would try not to look at auction properties. They seem to attract a lot of interest, they seem to have a lot of competition… When you look at buyer’s agents, if given the choice, they try and buy properties… prior to auctions,” Tom said.
“However if you’re in a marketplace where auctions are the done way… you’ve got to go with the flow because you’re not going to turn around and say, ‘I don’t want to look at auction properties. I only want to look at private treaties.’
That’s like opening up the white pages and saying, 'I’m only going to looking at the Joneses on page 24-28’ You want to get a comprehensive view of everyone.”
Tune in to Tom Panos’ episode on The Smart Property Investment Show to know more about the mistakes often committed by investors at auctions, as well as the simple secrets to finding and securing property bargains even in hot markets.