We sit down and do some projections, if they are comfortable with the numbers and the long term result they will go off and look at properties. Some will come back in a short period with a sale and purchase agreement ready to go while others will take months, looking at many properties but not finding the right one.
The question is how much time do you put into the search and will the time commitment reap rewards?
Lets look at an example: 2 couples, A & B, both looking for a investment property. They are after a $450,000-$500,000 house with a rental of $550pw.
Couple A view a few properties over the weekend, find one they like and make an offer. They end up with a $470,000 house with a rent of $560pw (rental return of 6.2%).
Couple B identify 20 properties that might fit, they view them over a month, make a short list but cannot decide on one property. This is repeated over a number of months but their enthusiasm has waned a little and they are pretty half-hearted about the search now.
Meanwhile couple A own the property, have tenants in and are now paying down the mortgage. Couple B may end up finding a ‘deal’ alternately because they have spent so long looking, house prices could have risen and they may end up with a more costly property.
Too many choices can add to much complication with decision making. If a property fits the profile, that is price and rent are good plus comes up to scratch on a building report, is there really a need to view many more houses?
