6 Steps to Finding an Investment Property

Once you have made a decision to seriously look at property as an investment you need to find one.    Here are the key steps:

1.     Get clear on what you want

The clearer you are about what you are looking for, the easier it will be to find your ideal property.

2.     Decide which type of property you want to purchase

Which investment strategy most appeals to you? Different strategies will be more suitable in certain areas.  Are you mainly looking for cashflow, for capital growth, something you can add value to, like a renovation, or adding a minor dwelling?

3.     Make a shortlist of the areas you are interested in

It’s always best to buy in an area you know well.  The more knowledge you have in an area the better deal you will do. Usually, when people start investing, they look at lots of areas.  This is important to get a good feel for the overall market. However, the downside is that it can be very hard to keep up to date with large areas.  You want to narrow down your preferred locations to a couple so you can build up extensive knowledge.  The larger the area you live in, the more important this is. Get a map of your city or town and mark the areas you like and the areas that you think have a large tenant demand, have great cashflow or are likely to have higher than average capital gains.

4.     Put together your buying rules

Active investors often have a list of buying rules.  These are the key things that they are looking for in a property.  For example:

·       Yield and purchase price limits

·       Location

·       Age and type of the property

·       Level of renovations they are prepared to do

·       The ability to add value, a sleepout or minor dwelling, sub-dividable

The advantage of using buying rules is that it helps you get really clear and focused on what you are looking for and ensures that you do not get side-tracked and buy something that is not ideal for you.

5.     Do your market research

Once you have made your shortlist of areas, you need to start learning as much as you can about them.  There are a plethora of resources to help you, like the numerous internet sites, Department of Building and Housing statistics, the Property Investor Magazine, fellow investors, your local Property Investors Association.  Spend some time walking, riding or driving around these areas.  Look out for a neglected property, with overgrown gardens, un-mown lawns, something that needs a general tidy up and a coat of paint.  All of these things are cheap and easy to fix, but they devalue the property considerably.

6.     Finding the property

There are a number of options for locating a property:

·       Various online websites

·       Private sales

·       Your networks

·       Mortgagee auctions

·       Real estate Agents

·       Buyers agents or property finders

 

This is the fifth in a six part series on Property Investment

 

Lisa Dudson is a bestselling author and Registered Financial Advisor with over 15 years industry experience. Her latest book The New Zealand Property Guide is a great resource for investors.  Lisa offers financial advice through www.acumen.co.nz and co-owns the New Zealand's leading property investment agency www.ifindproperty.co.nz

Go in the draw to win a copy of Lisa Dudson's new book - The New Zealand Property Guide. Email nz-editors@yahoo-inc.com with your details to go in the draw. Find out more about the book here.