26 Oct When’s the Best Time for Me To Buy Property?
However, most property investors begin with evaluating their finances at a very basic level – “Can we afford repayments, and is our loan approved?” And then moving straight to evaluating the market – “What areas shall we buy in?”
while this appears logical at first glance, if you equate property investment to being a business, it’s easier to see where the gaps in this process are.
In order to know when the right time to invest is, you need to gain a solid understanding as to what outcomes you are trying to achieve and the short and long-term financial implications. If you are planning on purchasing a property to rent out, you should look at the average return on investment, not only in the local area but in surrounding suburbs which have the opportunity to steal your market share. Evaluate local amenities and see if they fit in with your potential renter. Importantly, don’t use averages as a tool for understanding the type of rent you can charge. Use them as a guide, and then drill down – using real estate listings – as to what you could realistically expect for a specific type of property at a certain location. Many investors have been confused when their three bedroom, two bathroom property didn’t return the same as a basically identical property just down the road. But that other property was within walking distance to schools, and had a larger backyard.
Next, consider your personal finances and make sure you have plans and strategies in place for the unexpected. This doesn’t necessarily mean something bad happening (although you should plan for that) but also how you plan to expand your investment portfolio if that is something you wish to do, and what your long-term strategy looks like. My business would ever enter into an investment strategy without considering what may happen in the future.
Once you understand what you are trying to accomplish, and how your personal finances relate to that plan, you can begin to identify potential properties.
Then, it’s the perfect time to purchase