Entering the housing market in Sydney can be complicated and exhausting. So, here we leave our top 10 tips to keep in mind to be successful when buying an investment property.
Make your research
Know the current trends in the market and median prices. Also research the property you want to buy, and get insight into the surrounding neighbourhoods and their expected growth. This will give you an idea on how much the value of the property will increase overtime.
Buy based on analytical research, not based on feelings
It is easy to let yourself follow your gut but a good buy is backed up by data. Trust your analytical research more than your feelings, more times than not, it won’t fail you.
Make a plan and stick to it
Before buying, set realistic goals based on your investment capacity, and find a property that matches those two. Expecting a small investment to give you huge profits can be tempting but most of the time it is unrealistic. Don’t get tricked by fool’s gold.
Know if its business
Running a feasibility study is always a good idea, specially if you’re new to Sydney’s real estate investment game. A feasibility study is an analysis that takes every relevant aspect of a project or property into account to make sure it is profitable. In other words, is buying that property worth it?
Property investment companies tend to offer this services.
Don’t let FOMO push you to buy in a hurry
In the first quarter of 2021, Fear of Missing Out (FOMO) has helped drive housing prices to an all time high. Because of people rushing to buy properties, even though they are paying incredible prices, the supply for the incredible demand is unbalanced. If you find yourself anxious to rush and buy like everyone else, take a step back and rethink. Even though everyone is buying, it doesn’t mean you should too. Stick to your plan, breathe, and be patient. Waiting can go a long way.
But don’t be too overtly cautious
Being cautious is important but it cam translate into not acting at all. Buying property in Sydney can be risky, specially when the prices are so high but it is a worthy one.
During the pandemic, Australia suffered a technical recession, driving hundreds of people out of business. Yet, the housing market only saw a decrease of 2.2 per cent in prices, a very small number considering the situation. In comparison, New York City saw a decline of 58 per cent.
Don’t be scared. Take the leap.
Don’t over shoot
With the current incentives the government is giving to stimulate the economy once again, it can be tempting to buy a more expensive property to maximise you profits. But selling a real estate investment for profit can take time. As longs a decade. According to the Australian Bureau of Statistics, most properties in Sydney double their value every 10 years. So, if you can’t hold onto your property for a while, you could end up with little to no profits.
Be thorough with your research
Why is the owner selling? Is there many other properties being sold in the near surroundings? Why? Has the property been rented before? Why not?
Don’t skimp when it comes to property advice
Put simply, investing in property is a finance game with some houses thrown in the mix. Which is why, when it comes to financial advice and property investment advisors, do not try to skip it. It is an extra cost on top of your investment but it is a necessary one.
As said before, profiting from an investment property can take a while, and during your money intro one or two houses won’t solve your financial problems right away. After all, this is a waiting game.
Written by EB