Be a better property investor

Property buyers and investors at home and overseas have been enjoying a hassle-free experience for years, and it is something you can also achieve if you follow some basic, common-sense tips whether you are buying at home or further afield.

If you are purchasing property in a place you are unfamiliar with, it is even more important to take independent advice and follow some or all of these tips.

TIP 1: Strategy

Decide from day one what you want from your property investment. Are you looking for a second home, some capital appreciation or rental returns? That decision alone will determine the location and type of property you need to focus on. Agree on a time frame, and discover whether you will be able to exit your investment in a hurry. In some property markets, you may be looking at a substantial loss for a quick sale.

TIP 2: Act Early

The phrase “The early bird catches the worm … “ is also true when it comes to property investment. Acting early will also allow you to take advantage of the best units and the best prices. In most countries, you will find that prices rise between buying off-plan and completion.

TIP 3: Buy Wisely

Check to see the status of your purchase. Can you buy freehold condominiums in your own name, or must they be leasehold only? Can you buy landed property? Do you get a special visa along with the purchase? Who can ou sell to? These are all questions that any well informed buyer and investor needs to answer.

TIP 4: Size Matters

Buy the biggest unit you can afford, but do not extend yourself financially. Buying bigger units generally means better returns from long-term rentals versus short-term holiday lets, if rental returns are you goal.

TIP 5: Avoid oversupply

If rental is your strategy, avoid high-density developments like the plaque. You could be competing with up to 1,000 similar investors with the same strategy and same goal. You will have to spend more on decoration and furnishing your unit to make it stand out to potential tenants. Always think like the minds of your potential tenants. What will they want from your property?

TIP 6: Maintenance

Check the fees. In general, you get what you pay for. What might seem a good, low maintenance deal may equal a shabby, hard-to-sell unit in five years’ from now.

TIP 7: Unexpected fees

Check who pays for what. Do you, the developer or the agent pay for various aspects of the property purchase? It will vary from country to country and may not be the same as your own. It may also be open to a small amount of negotiation. Also, and this is vital, know your taxes and seek professional advice from both a legal and financial perspective. Read and, most importantly understand your contract before you sign it. If you have any doubts, question the agent and developer, and if you have any doubts whatsoever do not sign.

TIP 8: Guarantees

Guaranteed returns do offer a degree of peace of mind for first-time investors, but you must check the financial stability and record of accomplishment of who is offering the guarantee? Do you really need one? A good property in a good location will achieve a good rental return, and there will be just one person paying for the cost of providing that guarantee. Also ask what to expect after and guarantee period expires? Talk to local agents and property owners to get a true feeling of what can be expected after the guarantee expires.

TIP 9: Finance

In some countries, it is next to impossible to obtain finance as a foreign buyer, so if you have cash you are in a stronger position when it comes to doing the deal. Check to see if your chosen developer is open to offering developer finance, but also check how that will compare to the local interest rates. Often it can be double or triple.

TIP 10: Use a lawyer

Would you buy property here without a lawyer? I cannot stress how important this tip is. He will do due diligence on your behalf and make sure you understand everything before signing a contract. Use a lawyer that is an expert in the country you intend to purchase in, and has a record of accomplishment of dealing with property transactions. It will be a small price to pay for peace at night.

TIP 11: Use a professional agent

Remember that real estate agents have a job to do – sell property – but the best ones will also give you advice on what you should be buying – not only what they’re selling. They will also make you aware of any developments or developers who are best to avoid.

Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story based on his experience as a property journalist and more than 25 years in the media industry. To contact him about this or other stories email andrew@propertyguru.com.sg

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