Monday, 6 October 2014

Buying rental property in Canterbury

They say you make your profit when you buy a property, not when you sell it, as you are a little more in control of what you pay rather than what you are forced to sell for. With this in mind, why pay the high end retail price for a property just because it looks sweet and idyllic, when what you need is a property that meets all the financial requirements of a landlord first & foremost?

It is so easy, especially for the novice property investor, to fall in love with a property and let their heart rule their head, and to become so emotionally involved that they lose control of their finances and let their emotions win. The most important message to convey in all of this is that Canterbury investors MUST buy well in the first place, because if you start the investment process in the wrong place, the rest of the mathematics that need to be in place to validate this transaction just do not stack up. If a property price is too high, and you just cannot get anywhere negotiating some money off the price, then there is one thing to do and that is WALK AWAY, there will always be another opportunity along soon.

The novice investor often thinks that by paying more for a property they will get a better property (not necessarily true, again, just buy well). They cannot reasonably expect the market, which is an average of many transactions and house prices, to change its tune in order to meet them at their now inappropriate level of return (yield) that they expect, simply because they paid too much – market forces don’t work like that. If a property investor is not sure on the potential rental levels for a given location, just get them to speak to us for free, impartial advice. We can let them know not only how much rent to expect, but from that we can advise them how to work out what the maximum is that they should be paying, and how ‘letable’ a particular property may be – there is absolutely no point in buying something, or somewhere, where very little demand exists.
And as for buyer beware, well they better had beware it with a capital B. Check out the larger, more important items in the house such as the boiler, electrics and plumbing, especially when paying in cash, because many investors won’t do this, and if they end up buying a problem then they will own that problem.
If you are thinking of getting into the Canterbury property rental market and don't know where to start, speak to me for impartial advice and guidance to get the best return on your investment. 

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