While the economy and property market are in an uncertain place, now is a better time than ever to review your buying strategy to ensure you're on track to realise your long-term property goals.
Here, we share four property purchase tips to strengthen your strategy.
Set emotions aside
Warren Buffett famously said, "If you cannot control your emotions, you cannot control your money." This famous quote applies to all areas of money, from managing your household budget to property investing and planning for retirement. In all facets of your property portfolio, you need to set your emotions aside. For example, if you're looking for a property in a new area, don't get caught up on how you feel about a place. You need to focus on the numbers such as rental yields and/or growth potential. Sure, you can have an intuitive feeling about a place, but if the numbers don't stack up for the present or the future, that feeling alone is not reason enough to move ahead with a property.
Talk to experienced experts
It helps to talk to a range of qualified professionals throughout your property journey. Whether you're looking to buy your forever home, an investment property, a new mortgage, refinance or thinking about using the equity in one home to purchase your next, you need to seek specialised advice to ensure your decisions help you in realising your property goals. Often, the fee to get advice from financial professionals will far outweigh the cost of making a poor property transactional decision.
Identify and address risks – (Purchasing an investment property)
Like any investment, property investing has its own set of risks that need to be managed and addressed. For an investment property, a lot of the financial risk will be associated with the unexpected such as natural disasters, large scale repairs and maintenance and long vacancy periods. It's important that you understand the likelihood of these risks and set aside adequate cash to address these risks should they materialise.
Be cautious with hotspots
The next hotspot is always a popular topic in the property investing community. However, it doesn't mean flocking to this area to be one of the first to purchase is going to make your purchase a success. Instead of being pulled to an area as a result of the latest tips and news floating around the media, take the time to do your research and identify the areas you'd like to keep an eye on in accordance to your property brief. This process will also help you to ensure your suburb list and property research reflects your investing strategy, budget and financial goals.
Purchasing property – be it as a forever home or an investment – it isn't always easy. You need to play the long game, and you can't let the latest trends or emotions pull you off the path towards achieving your long-term wealth goals. Incorporate the approaches above into your research and analysis to ensure your strategy remains strong and consistent.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.