There is no doubt that today's real estate environment is primed for buyers looking to take advantage of the recovering phase of the market cycle, says Adrian Goslett, CEO of RE/MAX of Southern Africa. The current market has brought about a price correction over the past few years along with low interest rate levels that were last seen four decades ago.
"However," says Goslett, "when it comes to entering the world of real estate investment, it is vital that potential buyers arm themselves with the correct tools to make informed and wise purchase decisions."
There are a number of aspects that property buyers need to keep in mind when they want to make the most of their investment options. Goslett offers some advice and tips for property buyers to consider:
Knowledge is power
It is an age-old adage that we have heard over and over again, and for good reason. If you think education is expensive, try ignorance. Goslett says that the key to any property investment in any market is to do the necessary research and never invest in something that you don't fully understand. He notes that in order to get the most out of a property investment, buyers should look at all aspects such as location, possible additional costs that they could potentially incur if they want to renovate the property and investigate the maintenance costs. He says that essentially, to make the best investment in the current market conditions, buyers need to know the true value of the property. This can be done by comparing the rate per square meter of properties of the same standard in the same area to help pinpoint the best value. Having knowledge will empower an investor to discern between a good buy and a bad one.
Seek advice from professionals
An experienced, reputable real estate agent with working knowledge of an area will be the best person to seek advice from regarding purchasing property in the suburb. Estate agents have a wealth of knowledge regarding the market along with access to a variety of statistics and property tools that enable them to correctly determine fair market value.
Use technology
Rapid advancement in technology has meant that vast masses of information are readily available at the click of a button. Goslett says that the internet can be a remarkable tool for property buyers to search for the property in various areas without having to leave the comfort of their own home or office. There is a large amount of information on almost every town or city online, which includes types of properties and pricing. Using the internet and property search portals will save the buyer precious amounts of time and money.
Only consider the facts
It is important for buyers to disregard the other, intangible factors and only base their decision on the facts. Goslett says that buyers will need to base their choices on figures that they know, rather than feelings they may have regarding a certain investment. He notes that not everyone sees things in the same way. "While it might be important for you to have a view, there is no guarantee that prospective buyers will value it as highly as you do when you resell the house," he says.
Focus on motivated sellers
Property buyers should ask sellers their reason for selling the property, as this will give the buyer an indication as to how eager the seller is to move. If the seller is relocating and has put down an offer on another property, they will be more likely to negotiate on the asking price.
Work with people you trust
A house is an expensive investment with great potential for building wealth if undertaken correctly, so getting the truth now can save you a lot of money in the future. Goslett says that this is why it is important for property buyers to work with people that they can trust.
"It is important to remember that property investments are cyclical, which means they will go through both highs and lows. It is for this reason that property should be viewed as a long term investment with property buyers only looking to see the true value of their investment after a period of five years at least," concludes Goslett.
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