Opportunities abound in this current property market for newbie investors and first-time home buyers to get great value out of their property purchases. Being newcomers to buying property, buying property can sometimes be difficult and confusing. But do not fret, because this article offers 3 tips on how to determine a good value property purchase.
Tip #1: Location, Location, Location
The classic realtor’s mantra: “Location, location, location”. Whether a property is worthy of purchase depends on its location.
Properties that are located in areas with low crime rates and nearby amenities e.g. shopping centres, bus stops, train stations are often more highly sought-after as they offer greater peace of mind and convenience. Such properties are good value buys because it saves individuals and families the daily hassle and cost of travelling to buy groceries, or to go to school or work.
Therefore, home buyers who are looking to earn a quick buck after the Minimum Occupancy Period (MOP) and investors who are interested to earn higher rental income should definitely consider buying these properties due to their high desirability among tenants and other home buyers.
Tip #2: The Upside Appreciation
Once home buyers and investors have understood how a good property purchase is dependent on its location, it is now time to look at ability of upside appreciation of the property.
Future developments can affect the value of a property. Healthcare and educational developments such as hospitals and schools; public infrastructural developments such as train stations influence property values as much as commercial developments such as shopping centres and offices. Therefore, home buyers and investors have to keep themselves updated about the future developmental prospects in the area.
Properties that are located in “up-and-coming” suburb areas tend to have a greater ability to appreciate than properties that are located in mature estates. This is because there is a greater potential for suburb areas to be developed further while mature estates, having been developed, have little future developmental prospects.
Of course, living in under-developed suburb areas may pose slight inconveniences to individuals and families, as they have to bear with the daily trouble of travelling to work or school. However, the future prospect of shopping centres and train stations being built in the locale, reap returns in the form of better buying or rental offers from future home buyers and tenants. Therefore, properties in “up-and-coming” suburb areas still remain as good property purchasing choices.
Tip #3: How to Make the Initial Offer
Now that how future developments influence the ability of a property to appreciate further in value has been understood, it is time to explore some useful pointers on how to make the initial offer, so that home buyers and investors get the most bang for their buck.
- Check the Property’s Condition
The previous owner has probably left behind pre-existing furniture such as kitchen cabinets, lights, and even wardrobes. This means that home buyers and investors get to save on renovation costs, if they choose to accept them. Home buyers and investors may then adjust their offer in view of the property’s condition. Therefore, it is highly advisable that home buyers and investors check the condition of the property before making a suitable offer.
- Make an Informed Offer
Home buyers and investors should also consider the various physical and non-physical attributes of a property, such as its location, age, size, design, height, and compare its selling price with sale prices for comparable properties in the area.
If needed, home buyers and investors may engage the services of an experienced real estate agent to help them understand the value of a property, in order to make an appropriate initial offer.
Home buyers and investors should also make a reasonable offer that is affordable within their means. This means that when considering how much to offer, they should ensure that they are able to service the downpayment and the monthly installments, before making the offer.
Home buyers and investors should also be aware of the competition surrounding their desirable property purchase. There may be other competing buyers making an offer for the same property.
Look out for the number of days the property has been listed on the market, relative to how long an average property stays on the market before it is sold. The longer it has been listed, the lesser the competition amongst buyers.
Home buyers and investors may want to engage a real estate agent to help them make a competitive offer.
In today’s property market, chances still exist for home buyers and investors to make a good property purchase with potential upside appreciation. However, this requires home buyers and investors to truly understand what constitutes a good property purchase, factors that affect its ability to appreciate, and how to make an initial offer for their desired property. The tips and pointers offered in this article offer greater insights into determining a good value property purchase. It is not as overwhelming as it seems to be. Good luck in your property purchase!
By CY Low, belowVal