What ‘doing your research’ looks like when buying a property
Whether you’re a first home buyer or seasoned investor, doing your research before buying a property is the key to a great investment. While every armchair property expert may understand its’ importance, identifying exactly what to research and how to go about it is often a closely guarded secret.
Just as the Australian property market continues its’ evolution from year to year, so too does the availability of consumer information and data. There are thousands of websites offering investment information, eBook guides to buying and property data – but without an understanding of the what to look for and why it’s important, you can easily become trapped in a data overload.
Why Research is Important
Let me be absolutely clear – the property markets’ in Australia’s capital cities are extremely competitive. Knowing what you want, your goals and your budget are important steps – but without a clear understanding of the property market, finding the perfect investment will be almost impossible. Worse still, you may miss out on the property of your dreams because you weren’t looking in the right place.
Buying a property is a huge financial commitment, and possibly the biggest financial decision some people will make in their lives. So if you research and compare mobile phones, laptops or fridges before you buy, it makes sense that once your investment is scaled up, you will want to make sure you’ve made the right choice and used the right data.
There are some though that don’t want to do much research, and have no interest in devouring the data. If this is you, then experience is your key to success. It’s inevitable that during the process of finding properties, going to open for inspections, and attending auctions, you will find yourself soon becoming a bit of a property expert whether you like it or not. Take notes during your visits, develop an understanding of why certain areas offer higher prices than others, and don’t rush into a purchase you might regret!
Broadly speaking, property research can be split into two forms – Market Research and Building Research. Both groups are equally important, and represent the key facets of ‘doing your research’ when buying a property.
Finding the right information, data and analysis to make informed property decisions has never been more important or achievable. Thanks to innovative data solutions such as price estimate tools, suburb specific reports and huge troves of detailed historical market information, the savvy investor can build clear pictures of their ideal property.
With detailed data about your neighbourhood, previous and current sales figures, rental histories, and demographic insights, you can more accurately pinpoint what properties suit your lifestyle, goals and budget. Understanding this data also can help buyers to know when a property may be over or undervalued, which leads to better financial decisions.
Using specific tools (like a price estimate tool or RP Data Suburb Reports’) provides you with updated demographic data for a property’s neighbourhood and suburb, such as occupancy rates, age and lifestyle demographics, suburb trends for both houses and units, and more.
With this information, you can greatly improve your own understanding of not just city-wide or national markets but the housing market as it relates to any given neighbourhood.
Once you’ve identified the market segment to target, you will inevitably find a property which meets your requirements. When this happens, it’s important to get a clear picture of the building – warts and all. This is the more traditional side of property research, and one which should be factored into your costs when building your budget.
When you find a home or investment opportunity that speaks to you, it is necessary to use the services of a qualified building inspector or surveyor who will provide you with a written report covering any faults in the property and any renovations that have been made to it as well as recommending what it would take to fix these.
The cost of using a building inspector for a property you are interested in is well justified in providing you the peace of mind that your property is structurally sound. It’s also idea to speak to qualified tradespeople regarding any renovation ideas you may have, to make sure they are viable and can be budgeted for.
Getting The Right Result
I cannot stress the importance of good quality research enough, as it is the key to a good investment. A property should meet your requirements both in terms of market and building research, or you might regret the decision to buy.