Money Matters

The following topics should provide you with a head start understanding of how money can be easily saved or lost during the process of a property purchase and can apply to property purchases in general.

Make sure your Finance is appropriate

Some lending institutions will put lending limits on real estate purchases. This usually only applies to apartments with a very small floor area, very large developments and sometimes based on postcodes where they deem there is an over supply. These rules are reasonable and if you are making the right decision you shouldn’t have this problem. However some banks have implemented a (one size fits all) blanket rule and even though you may have found a genuine bargain they can restrict your ability to borrow.

When getting pre approval ensure you specify what and where you are intending to purchase and ask to be informed on any lending limitations or restricting policies that the lender may implement. It can be stressful and an annoying waste of critical time to pursue a new lender, when you have just found your dream property.

Paying too much for a property

Don’t get fooled by agent tactics, the thrill of an Auction or emotions. Assess the property’s value on facts. Don’t believe real estate gossip, do your research and know exactly what very similar proeprty's are selling for.

You should be of the mind set that you can happily walk away from the property if you don’t get it for a price it is worth.

You shouldn’t feel that you have stretched yourself or paid too much to make the purchase.

Buying from get rich quick seminars

Some times the sheer convenience of the property investment seminar can woo us into a purchase, all the details and glossy marketing facts are presented in the one comfortable setting and of course an immediate purchase can be made to ensure you don’t miss out on the wonderful opportunity that is being presented.

Convenience and the speed of process has its advantages, unfortunately you can end up paying for it and find that your purchase has been over inflated with unfair commissions and developer mark ups.

Identification of capital growth and historical sales results

This is obvious but often hard for the lay person to achieve but do what ever you can to get the sales history of the location and similar buildings.

You should know at what rate the homes in the location you want to buy have been increasing in price. The sales history can identify the price trend and give an indication of the rate of ownership turnover in the area. The less turnover there is the better as it gives an indication that the property's are tightly held, it also signals a potentially positive sign for future owners and market price improvements.