Location, location, location? More like, research, research, research
Location, location, location is the well-worn real estate mantra. But we often think this advice overlooks an essential first step.
While it doesn’t sound as exciting, the reality is that research, research, research will identify the location, location, location. And it will also help you determine what kind of home loan you’ll need, what you can afford, and what kind of investment you’ll be getting long-term.
So where do you start? We’ve listed eight areas that you should be looking into before you get your heart (or head) set on your dream property. Read on to find out what they are.
1. Research your borrowing power
This first step is as easy as picking up the phone and making an appointment with us! As your mortgage broker, we’ll help you determine your borrowing power and give you a clear understanding of how much you can realistically afford to spend on your new property. In this process, we’ll get to know you financially. Having an accurate idea of your borrowing power will help ensure that you’re looking in the right price range from the very start, and will make sure that you have a home loan that you can afford.
2. Research the criteria for your desired property
It’ll be easier to research the property that you’re looking for when you have a set of criteria. With a lot of quality properties to choose from, it’s easy to fall in love with aesthetics, so it’s important to make sure that the property meets your requirements. Here are some useful questions to ask yourself when listing down your set of criteria:
- What is your main purpose or reason for buying a property?
- How long do you plan on staying in the property?
- Do you have a budget for ongoing repairs and maintenance?
- Who would potentially rent your property or buy it when you decide to sell?
3. Research the suburb and the surrounding area
Now we’re getting closer to ‘location’. Do you know where you would like to buy? Whether you’re a home buyer or an investor, the aim is to purchase in an area that has good capital growth potential. suburb with solid capital growth potential. It’s also better to buy in a town or suburb that is in early stages of growth, rather than at the peak of a growth cycle – or, worse, in the decline! The area that surrounds your first-choice spot is also worth exploring. Get to know what local facilities are around, within walking distance or a short drive away. This will increase its appeal to potential renters if investing is your strategy, but it could also influence the current value. We have comprehensive and up-to-date market reports on-hand, so can provide these to you to help you learn more about where you are looking to buy.
4. Research the property
This is where you need to look beyond the cover. When you inspect the property you’re considering, you need to check both inside and out. A checklist to take with you should include:
- The ceilings and cornices – is there any indications of water leaks, such as water stains? If so, it would be sensible to get a buildng inspector in for a closer look
- Check the floors – if there is carpet, identify if they are over the top of floorboards or cement – this will impact any future decisions you might make about floor coverings, renovations or extensions
- Is the floor even? If not, in can indicate other, bigger issues
- A pest inspection is a sensible investment if you’re really keen. We can help you find a reputable provider
- Is there cracks in any brickwork, or the driveway? Again, this can indicate bigger issues lying literally under the surface
- What about mildew in the eaves?
These are all things that can be hard to identify if you’re not experienced. We have a number of great local building and pest inspection companies that we deal with regularly – let us know if you’d like help to find one that suits your budget and needs.
- 5. Research the price
Are you getting a good deal? The best way to tell is to research other sales in the area you are looking at, so you can get a good idea of what has been paid for similar properties. You can go online to do this – or let us know, and we can help you out.
And while we are talking price, make sure you also build-in ongoing costs when setting your budget. Council rates, water costs and strata fees are all standard, ongoing costs that you need to factor in.
6. Research the rental yield
What could you realistically get if you were going to put the property up for rent? It’s not just about what you think people should pay. You might live in an area that currently has a high rental demand, like Warrnambool. This will mean you may be able to predict a higher weekly rent for your property. But if there is a high vacancy rate, and low demand for rental properties, like currently exists in areas such as Mortlake, then rental yeild may be lower than what you might think. Once again, online is a good place to start; market reports can tell you what the median house price is in the location you’re considering, what the growth rates are, and what current rental yields and demand looks like. This can get a little complicated, so let us know if you would like some help deciphering the data.
7. Research the history
You may want to get to know the property a little bit more by researching its history. You can trace the history of a property through online archives, street directories, council rate books, and Title Office records. It’s also important to know if the area or property has been flooded before, as this can have a big impact on a property’s resale value.
8. Research the professionals you’ll need
Make sure to consult with reliable professionals (like us) who can give you advice that’s useful in your property hunting journey. We can give you referrals and you can also do additional research. Best practice is to ask for recommendations from friends and family based on their experience with that service provider. You can also check reviews and testimonials.
We can’t stress enough the importance of doing plenty of research before applying for a home loan to purchase a house or an investment property.
But we guarantee that the effort will be well worth it in the long run. And of course, we are here to help you every step of the way. Get in touch to start the ball rolling.