Investors Ask: My first purchase
Q. I am looking to invest in property for the first time, what are some good resources and how can I find a good area to invest in?
A. As a first time investor I’d recommend you firstly determine how much you are able to borrow, so speak with the bank or a mortgage broker, get a budget together and ensure you allow for a buffer in your expense and revenue assumptions.
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Now that you know how much you are able to spend you can narrow your search down to those suburbs where you are able to afford a property. Next step is to do your research; identify the suburbs that have properties for sale that meet your price and rental yield criteria.
As a first-time investor, a good place to start is to download the free RP Data Autumn Investor Guide by visiting www.myrpdata.com.au/investorsguide.
This report provides some extremely valuable information and best of all, it’s free. By using a five-year retrospective analysis, we’ve been able to provide a guide as to where properties have seen the best value growth, and where the best rental growth and yields have been evident.
Another idea is to visit the RP data consumer website and download a free suburb profile.
When investing for the first time, don’t be hasty – take your time as there are plenty of bargains in the offering across Australia’s capital cities and in the regions. Doing your homework can make all the difference.
Some of the key things I would advise a first time investor to do is find out about the local rental market; rental demand will generally be strong in areas that are close to large employment nodes, universities and efficient transport options.
Once you’re satisfied that you’ll be buying in a progressive area with good amenities, start identifying individual properties that meet your investment criteria. It is critical at this stage that you have a firm understanding of fair market value.
Look at recent comparable sales in the local area and if you aren’t confident in your assessment you can always get an independent valuation on the property. You can use this recent comparable data on both sales and listings to help you with negotiating as well.
If you aren’t confident in your negotiation ability you can always use a buyer’s agent to act on your behalf. Remember investing should be devoid of emotion – base your decision on the numbers and the location.
RP Data national research director Tim Lawless
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