Neil Vorster is a South African property investor and coach. He writes a regular blog and newsletter to which I subscribe. His 7 tips to acquiring a Great Investment Property just have to be shared!
Neil says everybody wants to know how to pick a winner, and fortunately with property investment the luck or gambling element can be almost entirely removed.
You don’t have to settle for average!
By following these 7 tips, you can be well on your way to beating and even doubling the national averages and acquiring really great investment property.
This one is somewhat overdone, but I am constantly amazed at how little attention potential investors give to location. Property value is intrinsically tied up in its usefulness to the future tenants. It stands to reason that any property that is well located, close to desirable places of work and transport nodes and routes will be more valuable to tenants.
2. Type of property
When looking for a great investment property, a townhouse with a good security system, controlled visitor access and 24/7 security guards will win over a normal house or flat any day!
There are agents and there are agents!
The secures his or her 3 month sole mandate by hyping up the property value. Then they start the process of bringing the seller down to reality in the hopes of securing a sale. Naturally it will be difficult for an investor to get a great deal from “seller’s agent” as commission comes from the sale. Whereas a “buyer’s agent” will often undervalue a property for a fast efficient sale. This type of agent is solid gold to you, the investor.
4. Local agent networking
Once you have selected your choice investment location, the work begins; Start by looking up the agents who are very active in the area and cultivate relationships with them. A regular monthly email or phone call from you will keep you top of mind for when that “urgent/bargain” deal crosses their desk.
5. The internet
Scouring the internet adverts can reap good dividends, but cannot completely substitute getting out there and looking at properties. There are websites that will scour the internet for you and return any new listings of your selected complex to your email inbox.
People naturally perceive greater value in a property that is newly painted, spotlessly tidy and ready for show-day. They therefore will pay a higher price.
A property in poor condition, requiring paint and perhaps some running repairs to the cupboards and/or inhabited by a messy tenant who feels threatened by a sale, will be overlooked by many potential purchasers. This provides an excellent negotiating opportunity for an investor to factor into his price a paint job and some minor repairs. I call this seeing through the clutter and discerning the true value of a property.
7. Bargain hunting
Lastly, Property investment is a long term decision that, when done correctly, provides massive returns on your investment. Most investors cannot recall the exact prices paid for properties purchased 10 years ago, and even if they did, the numbers would make you laugh!
I have seen many investors pass over an opportunity of buying a great investment property because they are desperate to knock the seller down to his last penny.
So Neil’s advice in a nutshell:
- do your homework,
- know your areas and prices and
- when a good opportunity presents itself, secure the property.
Hope these tips from Neil were helpful
Go well till the next time