Knowing what to ask your real estate agent when buying an investment property can save you so much time, money and pain in the short and long run. After all, buying a home is one of the biggest financial decisions that you are ever likely to make, and if you’re specifically buying it as a means of making money over time, you want to be sure that you have all the information you can get before signing the dotted line.
At My Rental, we are dedicated to innovation within the Australian property management industry. Because of this, we’ve helped property owners across the country get more out of their investment, all without them having to worry about the day-to-day tasks of being a landlord. So, with that in mind, we’ve put together a quick list of what to ask your real estate agent when buying an investment property, and what you should know going into a property purchase.
When it comes to buying an investment property, as with any property that you’re looking to make a profit off of, the location is going to be as important as the property itself. This means that things happening near your property will impact its value, for better or worse, and that anything new planned for the neighbourhood needs to be considered. So, when you’re putting together a list of what to ask your real estate agent when buying your next investment property, it is vital that you ask about any planned or ongoing work around the neighbourhood which may have an effect on your property’s desirability or value.
When looking through the planned builds and infrastructure developments for the area, if there are any currently in motion, you should take a moment to consider how these things would be perceived by potential tenants living in your property. For example, if there is a freeway being constructed within the next 5 years, this could be a benefit or a detriment depending on a variety of factors, such as how far away it is planned to be, and the likelihood that it will lead to noise pollution. Once you have considered these factors, whether you decide to go with the property or not is entirely up to you. However, no matter what, it’s important that you have all the facts to ask your real estate agent.
As anyone who has bought a house before can tell you, it’s impossible to know every facet of a property simply by looking at it. Electrics can be old, plumbing can be inconsistent, and there is a wealth of other important touchpoints which aren’t immediately obvious during a base inspection. So, when you’re speaking with your real estate agent, it’s good to ask questions about renovations and updates that have been made to the property.
When was the roof last checked? How long since this AC system was installed? When was the hot water system last replaced? By asking these questions early in the process, you can have a better understanding of the issues you may need to address in the coming years, or even the coming months, if you decide to buy this property. Remember that getting a house for $10,000 under the asking price won’t mean much if you need to immediately take on $30,000 of unforeseen renovations.
Whilst it may seem like an odd question, the understanding of why someone would want to part with a property if it’s as good as the real estate agent is telling you it is will be an important factor. People decide to move on from properties for dozens of reasons, and whilst most will be relatively benign, some can shed light on potential flaws of the property as an investment. When doing this, however, just remember that situations can be complicated, and it’s good to take a nuanced look at the circumstances of why someone may give up a property.
If you’re someone who is planning on renting their property out as a form of passive income, then it’s best to know what you can realistically expect your home to bring in once it’s on the rental market. Keep in mind when asking this, however, that your real estate agent will be motivated potentially provide exaggerated information in the process of selling a home, and it’s good to do your own research on the subject where possible. When doing so, remember to take into consideration what types of properties you’re looking at. After all, a two-storey house in Ashburton will have a different rental yield than one in South Yarra, and a 1-bedroom apartment is going to have a different yield than a mansion in the same suburb.
Being a property investor means knowing which questions to ask and what information you need. So, by looking at what to ask your real estate agent when buying an investment property, you’ve already taken a fantastic first step. Want to learn more about the Australian real estate market? Want more tips on how to handle your investment? Then stay up-to-date with the My Rental real estate blog for more information like this.
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