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Helpful tips when buying property

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Helpful tips when buying property

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Real estate investors all have different reasons for buying property, whether it be for personal use, to rent out for a monthly income or to resell at a higher price. No matter what the reason is, there are a few guidelines that should be considered if homeowners want to get the most out of their investment. Property buyers need to attract the right tenants and make the right decisions if they want to benefit greatly on their investment. 

Here are six helpful tips to follow when purchasing property in South Africa:

 

1.    Research 

Firstly, ask yourself why you are buying the property? This will place value on different features of the house. If you are looking to move in and make it home, features and comfort are more likely going to attract you. If you are wanting to rent it out, you’ll need to take in to consideration what tenants would want, such as the proximity to schools, restaurants and shops. Researching an area in person, rather than on the internet, will give you a much better understanding of what’s around you or your tenants. You should visit the location during different times of the day to see what the traffic is like, how safe it looks and how noisy it gets before making the purchase.

2.    Location

Property prices regulate depending on their location. A relatively cheap property in a popular area will be a better investment than a more expensive property in a less appealing area. The location is more likely to affect the value of a property over time than the actual house itself. 

3.    Plan ahead

For the more serious investors looking to build a portfolio, they need to consider their long-term goals. These goals will guide them to their choices and will direct their final decisions. Planning ahead is also important for one-time buyers. They need to think about how they benefit from of the property in the next couple of decades. This will influence their decision to purchase a certain property.

4.    Doing the sums

A good investor will always apply good property buying principles, by looking at the location, the value per square metre and the estimated rental income. By adding up these amounts with the potential rental income, a property buyer can evaluate how profitable it will be. 

Buyers looking for a personal home will need to look at what renovations need to be done on the property to fix it up. An estimate of the total cost of repair will be a good way to see if purchasing the property will be worth it over time.

5.    Credit scores

Financial assistance is needed by the majority of buyers when purchasing a home, so it is vital to do everything you can to improve your credit score before asking the bank for a loan. Financial assistance applications for are more likely to be granted to individuals with good records of paying back debt. Keeping a clean credit record is vital, find out your score and seek assistance from a financial advisor on how to make sure it is improved. Buyers should also ensure that they have enough money for a deposit, as asking for a loan for the deposit is not ideal.

6.    Is it good enough?

Those of you looking to buy a property as a rental investment, you need to consider more than just the rental yield. Put yourself in the tenant’s shoes and ask yourself if you would be happy to live there. If the house or the location don’t appeal to you, then the property probably won’t appeal to a tenant either. 

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Ensure that you have considered these six points when buying a property. This will maximise the return on your investment and is likely to increase in value over time. Whether you want to move in yourself or rent it out, a good home is a carefully considered home.

Author Gated Estates
Published 18 Oct 2018 / Views -
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