Are You A Home Buyer or A Property Investor?
Important Criteria to Consider as Homebuyer or Property Investor
There are different drivers in play when a home buyer searches for a home to purchase versus an investor looking for an investment property. Key factors such as primary objectives, personal criteria, and emotion play important roles on what, where and how you choose it. If you are looking to purchase a home or investment property then these are some points to be aware of.
Home Buyers Building a Dream
Professional buyer’s agent Miriam Sandkuhler says that for a home buyer emotion is the primary driver. When you decide on a home you are “fulfilling a dream”. That dream can include different requirements like peace and quiet, financial stability, and having a space to grow a family. When you consider those factors you might base your purchase on proximity to a good schoolzone, staying close to family and friends, or staying within the community you love. These emotional factors determine the particular property and location you choose.
Property Investors: Leave Self-References at the Door!
As a property investor, your criteria needs to be different. According to Miriam, an investor's primary drive should be “fulfilling your wealth creation needs and financial security.” This means looking at things from an unemotional and analytical viewpoint and really focusing on the numbers and objectives. Miriam says the first thing to ask is: “Are you buying a property for cashflow purposes to generate an income or are you buying for capital growth?” After you make that decision you need to understand the correlating properties that tick those boxes. There is no room to put your personal filters in front of making a clear, unemotional decision. Investors sometimes say, “Look, I wouldn’t live here so I don’t want to buy it” or “I don't like the floor plan because it doesn’t work for me.” This is a classic case of self-referencing and you need to remember that what you want in a property may not be the same as the needs of tenant you are trying to attract.
Homebuyer or Investor: Get Your Experts in Order!
While there are differences when you are purchasing a property as a home buyer versus as a property investor, there are also some important similarities you should consider. Engaging the right experts to help you from the start is imperative. As well as contacting a buyer’s agent (who is key to your search process) you should:
- Speak to a mortgage broker - Far too often people contact the sales agent before getting a detailed assessment of their borrowing capacity. People assume they can spend “X” amount of dollars but after going through the lending application the outcome is very different. Sandkuhler says, “Buyers can save themselves a lot of time, heartache and effort by seeing a broker first and lodging a lending application before the search process begins.”
- Get a conveyance or solicitor to review any contracts before you put any formal offer to buy out there. They will help you to reduce and risks associated with the contract of sale and property.
- Engage a building and pest inspector to ensure the property you are interested in doesn't have any major problems associated with it.
What's Next?
Emotions aside, whether you are out to fulfill your dreams or to increase your wealth it is always best to get a team of experts together who know the market and who can help you succeed in your search. Make this new and exciting property venture a seamless one that you can enjoy.
A buyer’s agent in Melbourne or your own city can help you make more informed choices. If you’re looking for a buyer’s advocate in Melbourne to help assist you with purchasing an investment property, Property Mavens has you covered.
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About Miriam Sandkuhler, Property Investment Advisor
With Diplomas in Property and Business Studies – in a non ASIC regulated industry, she’s uniquely qualified to develop and also fulfill successful and sustainable property investment strategies for her diverse range of clients - investors, SMSF trustees and home buyers alike.
