Real Estate: Another Source of Excitement?

Whether you are contemplating buying your 1st house or your 20th property, you will find this article helpful. The responsibility to uncover areas with potential cannot be delegated. Even when armed with good advisers, you have to rip open the curtain to reveal the truth behind any hype, rumour, misinformation, and sweeping sales statements.

Fundamentals, not emotions!

Although there is a lot of money to be made in property speculation, you need a deep pocket to do this well. But you can achieve the same result with less risk by investing based on the economics of the area the property is situated. Investment decision founded on reality is more profitable than the one centred on someone else’s opinions or perceptions.

Emotional investing only provides a short-term gain followed by frustration and despondency. The property market is like a bus transit system; when one leaves, another arrives. So, take time to ask probing questions and follow through.

You ought to jettison your simplistic approach and embrace a more robust, fundamental analysis.

You are the prime target as an investor!

The numbers and brilliant presentations by vendors should be independently confirmed. After all, that is their job: providing you with strong arguments to buy their properties.

Before a deal is consummated, cut through the hype and complete your investigation. Do not be pressured into taking rash decisions.

You are buying the future, not the past!

To unearth the future potential of an area in which your desired property is situated, pay attention to the following:

1. Population growth rate of the area.

2. In-migration and the drivers.

3. Average income in the area.

4. Political atmosphere

5. Area undergoing redevelopment and surrounding areas.

6. Area witnessing major infrastructural development.

7. Vacancy rate, sales price trend, rental price trend and the yield.