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Don't heed the ramblings of get-rick-quick property spruikers; follow some basic principles and you'll separate the wheat from the chaff when making your next investment decision.
Establish a Strategy. Determine your motivation for the investing as this will influence the type of properties you secure: are you looking for solid capital growth or good rental returns. Your strategy will affect why you might choose a flat in the city or a house in the country for instance.
Set Limits. Set you own limits based on what you can afford (for your appetite for risk) rather than what lenders are willing to lend you.
Know the Neighbourhood. Get to know the area you intend to invest in. Do your research to confirm the level of rental demand, planned developments, employment opportunities, etc.
Secure the Right Finance. While interest only products tend to suit most investment situations, there are many options, including lines of credit, available so always secure independent advice.
Find the Right Tenants to avoid lost rent or high repair and maintenance costs and if you don't have the time or inclination to manage the property yourself, engage the help of a trusted agent - they'll collect the rent and deal with any problems.
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There is room to maneuver in any negotiation, and property is no exception. Arm yourself with some basic buying strategies and you could save (make) a tidy sum.
Do the Numbers: Know your market. Once you get the feel for property prices in your chosen area you can bid with confidence. Check prices online and in the local paper, but don't stop there. Get out and see as many properties in your target area as possible - there is often a big difference between an advertised desciption and the actual bricks and mortar!
Count your Dollars: Before you begin your property hunt establish your bottom line. Determine your borrowing capabilities and how much you can afford to repay each month. Consider all expenses on top of the purchase price: stamp duty, legal fees and other costs all add up.
Know your Opponent: The more information you have about a seller's motivations the better your position to drive down the price. Is it a forced sale? Has the vendor already brought another property? Ask the agent why the vendor is selling - this may indicate how flexible the price is.
Start Low and Keep it Slow: Always begin with a low but realistic offer. In a buyers' market 10 per cent reductions are not uncommon. There are also plenty of properties for you to choose from - and the vendor knows it. Don't get pressured into moving too quickly for comfort - keep the negotiating pace on your terms.
Money Talks: At the end of the day an agent is likely to support a bid from a buyer who has cash available. A pre-approval will always give you the edge if you are competing with a buyer without finance.
Don't Believe the Hype: There's nothing an agent likes more than a number of buyers trying toout-bid each other. Remember the agent represents the seller - not you. Don't end up bidding more than you should for fear of missing out. It is better to walk away than pay above the market value.
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