So you've decided to take the plunge and buy an investment property. You've done the work crunching the numbers and it looks like they stack up, so now comes the hard bit of scouring the internet, visiting open homes, talking with agents and negotiating. If you already own your own home you may think you've got a pretty good idea of what to look for, but buying a property for investment purposes is much different than buying a property to live in.
When buying their own home many people look at how the property makes them 'feel' and a gut instinct. Property investment requires much more head and much less heart than buying a home. Here are some things to look out for when purchasing an investment property:
- What on-going or up-coming maintenance will be required on the property? You'll need to factor this into your number crunching. Getting a building report is a must.
- It's becoming increasingly important to check for drug contamination from past owners or tenants, often this can be done as part of a building report. Renting out a contaminated house could leave you in breach of your responsibilities as a landlord and you could face huge costs to decontaminate the house.
- The neighbourhood will affect the type of tenant you are likely to attract. Think about who you want to rent your property and what would be desirable to them. Things such as schools, proximity to public transport, amenities, CBD, tertiary institutions or large workplaces etc could make the property desirable to renters.
- Keep an eye out for private sales, mortgagee sales or those that have a tight deadline as you may be able to nab a bargain and buy at a good price.
- And finally, view and research as many properties as you possibly can this will ensure that you are armed with as much knowledge and information as possible and can make the most informed buying decision.
The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.