Looking for the right investment property opportunity may need more research than when purchasing the right property for family living. Everyone has a different property investment strategy, but at the end of the day an investment property should to be earning you money, not creating a lifestyle.
Therefore there usually are more considerations to take into account, especially as regards the profit you will make from a property investment when it is going to be added to your property portfolio.
The fact is there are many property investment opportunities on the market at any one time, but whether they are suitable to add to your portfolio or not is the question? If good property investment strategies are not in place these property investment opportunities could be here and gone before you are organized to purchase.
These 11 steps will make the process of buying an investment property for immediate rental easier and give it more chance of producing the return that is expected.
1. Find out how much equity is available to put into a new investment property.
2. Discuss your situation with a good mortgage broker and find out what monies can be borrowed, which will then give a property price range within which to work.
3. Check out the property investment business plan and go over the criteria for purchasing - the size, transport, how many bathrooms, garages, construction, yard etc and also location details as regards schools, transport and so on.
4. Do your research to see where you can find a property with your criteria and with the money you have available - at this stage there may need to be an adjustment as you may need to buy in another area than you first intended and that should be OK as long as you do your homework on the real estate in that area.
5. Shortlist areas of interest and contact some local agaents.
6. Make a short list of properties to look at that fit within your criteria.
7. Once you have looked at the properties, make an even shorter list from which to buy.
8. Use online calculators or a property investment program to ensure that you will make the required money from the property of interest and check again it fits your criteria.
9. Make an offer and go to contract (don't forget to use the right buying entity on the contract) and cover yourself with clauses regarding finance and building inspection so that you have an out should you need it
10. Complete all your inspections for pests and so on and get a valuation if needs be.
11. Confirm that all your requirements have been met, finance approved and go to settlement.
Strictly speaking the steps outlined here are pretty standard when purchasing an investment property. Each time you purchase a property you will find that steps 1 and 2 will need to be done and step 3 should be part of the property business plan.
Investors find it easier to have a set plan.
If an investor has a set plan to follow when purchasing property it does actually save a lot of time as particular property prices will be more familiar and it is easier to compare one property with another. It means that you are not trying to compare a 3 bedroom townhouse against a 4 bedroom house or 1 bathroom against 3 bathrooms. You can see what I mean here. Each different property falls within a different price range and this is why it is easier and safer to be able to compare one with another comparable one, rather than two different ones.
Using set criteria for purchasing will make finding the right property investment opportunity so much easier and you will not have the need to keep changing your property investment strategies.
Copyright (c) 2010 Kaye Dennan
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Kaye Dennan has been involved in property investing for many years personally and also as a licensed real estate principal. For over 15 years Kaye been associated with it herself and been helping clients for over 10 years. Kaye is keen to help others with the tips learnt over the years. For more insight into property investing go to http://propertyinvestmentknowhow.com
