With the beginning of a new financial year I bet many of us are thinking about our money, future and investments so I thought it would be appropriate to discuss three beneficial tips to reduce the risk of investing in property.
My first tip of advice would be to get an independent valuation. Whilst a $50 valuation may save you money and give you some idea, a full $500-600 valuation, including a complete comprehensive property inspection, will almost guarantee that you do not over pay for your investment. You can also get valuation for properties that have been built. In this scenario the architecture and building plans are reviewed with the corresponding suburb data to produce an accurate valuation.
Secondly, I suggest you take out a building inspection. If you yourself are not in the building trade then you will need to get a full building inspection performed for every property before you purchase. Even if the property you are interested in is a unit and maintained by strata, you still need to get have one completed as you will share that cost. You may discover expensive concrete cancer that they were not yet aware of which would cause you great financial grief.
And thirdly, always conduct a strata inspection. There are many buildings that have $50-100k special levies per unit allocated to repair common areas, such as the external building, doors and windows. If you are stretching your budget to take up the investment, then these costs could make or break your limits given lenders often do not loan for this kind of building work until it is completed.
So if you are considering purchasing an investment property, take your time and perform the above three steps to make sure you get the best value for your buck.