Blog posted by Kumars Property Investors (KPI)
While we all know that real estate has been a wonderful investment for millions of Australians, new investors are often a little nervous about getting started.
In fact, a recent survey of more than 2000 people shows that 40 per cent of first-time homebuyers felt anxious and another 44 per cent felt nervous throughout the entire buying process. Even more alarmingly, buying a property actually reduced one in three people to tears.
Fortunately, there are a number of things you can do to make the process easier and less stressful when the time comes to buy that first investment property.
Here’s how to overcome some of these challenges.
Being Prepared
Buying a property can actually take a lot longer than most people think and can also be far more emotional.
Typically most home buyers will need to view at least six properties before they find something that suits their needs. This can lead to many weeks if not months of searching and attending home opens, but the real issue is that the process can become very emotionally taxing.
If you’re buying an investment property, it’s vital that you focus on the numbers and don’t get caught up in the emotional rollercoaster. When you start getting emotional, buyers can create a fear of missing out which leads them to make poor decisions.
One of the most effective ways to overcome this is through proper preparation. Doing your due diligence on a location well before the time comes to make an offer is vital. You should also have your finance preapproval in place so you know your budget and you can make a strong offer when the right property comes along.
Making the Right Offer
In places like Sydney and Melbourne, where agents offer price guides, it’s very common for properties to sell well over what an agent says it might be worth.
Agents typically try and bring multiple buyers together in the hopes that competition will dramatically increase the price the property sells for. While this might be good for the vendor, it can lead to a lot of stress and missing out from unsuspecting buyers.
The best way to overcome this issue is to understand what a property is actually worth. To do this you need to become an area expert and take a very close look at the recent comparable sales.
Missing out on properties regularly with offers that are too low often comes down to not understanding the market well enough and knowing what a property will actually sell for.
Negotiating Effectively
Negotiating on a property can be one of the trickiest parts of the home buying process for first-time investors.
For the most part, in our daily lives, we don’t spend much time negotiating for anything. When it comes to houses, most people will only ever buy one or two properties in their entire lives, meaning that you don’t ever get much experience negotiating at all.
In fact, only 40 per cent of first-time homebuyers are comfortable negotiating the purchase price of the property with a real estate agent. It’s important to understand that a real estate agent is a professional negotiator and that can make it difficult for new investors who is largely a novice.
One of the best ways to negotiate is when you have a clear plan in place before ever making an offer. It’s also vital that you understand the true value of a property, so when the time comes to make an offer you can be confident in the numbers.
Getting Help
Oftentimes the biggest risk new investors face is simply getting overwhelmed and taking far too long to purchase a property.
In a strong market, if you wait six months to finally find a property, prices could well have significantly increased when markets are moving higher. One of the best ways to fast track the process and also get the confidence that you’re buying a quality investment property is to work with an expert.
A buyers agent will help you identify investment-grade properties in areas that are likely to see capital growth in the years ahead. While also negotiating on your behalf to make sure you’re getting the very best deal that you possibly can.
If you’re stressed and worried about investing in property, there’s no need to be. A buyers agent is a great way to get you starting investing without the emotional rollercoaster and stress that normally prevents most people from ever getting started.
At KPI, our focus is on helping new investors get started in property the right way. We understand that buying your first investment property can be daunting and it’s why we’re here to help you every step of the way so you can avoid the stress.
If you’re interested in getting started investing in property, but not sure where you should begin, feel free to get in touch and we can discuss the best options for your situation and financial goals.