How do you avoid buying the wrong property investment?

How do you avoid buying the wrong property investment?

How do you avoid buying the wrong property investment?

With many properties in the market and Asia being a targeted hot market, which should you choose to invest in? Handing over a down payment for a property isn’t like an over-the-counter purchase, and we understand the concerns running through your head. Some of which, would be …

How do you avoid?

  1. Buying in the wrong location
  2. Buying at the wrong time
  3. Paying too much for your property
  4. Not having a fully protected investment
  5. Not having the right servicing

Here are the fundamentals that we go through before we begin to recommend any investment property to our clients. Consider them, and practice these methods as we do for ourselves on your investment purchase.

MACRO RESEARCH

This involves a deep understanding of the general global markets and opportunities available.  This is a daily and ongoing exercise to ensure that you are looking in the right markets for the very best investment opportunities.

One of the main indicators will be property cycles.

Within those markets, you would be able to locate which locations and asset class offer the best opportunities to investors.

MICRO RESEARCH
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Once you have narrowed down the best areas within a market you are looking into, you should then look into the geographical-social factors of the area.

Some vital points you should look into:

  1. Population Growth
  2. Town/City Planning
  3. Ongoing Investments
  4. Rental Demand
  5. Supply available and upcoming
  6. Valuation Opportunity (Micro Property Cycle)
  7. Job Creation
  8. Affordability Indicators

FINANCIALS

One of the main fundamentals you should look at when buying investment property is the Rental Yield.  Always look to achieve above average rental yields for your investment.  This not only gives you positive cash flow and reduces risk, it also maximizes the potential for future property gain.

Also very important is leverage, as this will maximize the return of your investment. In the biggest opportunity markets this is something that can be difficult to achieve, so when you have the option to gain extra leverage, safely and securely, then this massively maximizes your returns.

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STRUCTURE

Once the detailed research and financial fundamentals match your satisfaction, structure out a legal process with a lawyer to protect your investments. G.I.P has a network of lawyers available for your convenience when investing in any of our properties who will review a structure of opportunity.

SERVICING

If you are considering an investment opportunity in a different country, look to inquire about hands free and fully managed properties. This will ease your concerns to occupy the property with tenants, and ensures a constant flow of rental income. You need a thorough understanding of servicing and ongoing operations of the investment, which is best to find out from the developer or agent.

DUE DILLIGENCE

The final due diligence phase will include such matters as below:

  1. Developer Track Record and performance
  2. Legal Partners Track Record
  3. Personal relationship and accessibility of partners
  4. Personal Visits to all
  5. Strong contractual agreements

This is an overview of some of the fundamental processes that you must consider prior to purchasing an investment property. There are many levels and a lot of time taken into all of these matters, and it takes a long time to tick all of the boxes. However, rest assured that if you follow these steps, you would be making a long term investment with the best returns possible from that property.

If you do not have all the knowledge required to take these steps, then I strongly encourage you to find learning platforms, which can help you build those skills.  Alternatively you must look to trusted partners whom do take such steps, and ensure you understand and verify their approach, before you invest.

Remember you should always be in control of your own investment decisions, and avoid following the herd and being “sold to”.

LIVE YOUR TRUE POTENTIAL
Cash Performance Mentor

Mark Graham

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