Last time, I shared my top tips for building your investment strategy. So this time, I want to share the final piece of the puzzle. Tips on finding the perfect investment property.
Tip number one. Never buy a property just because you like it. That perfect little nook to sit and read your book on a winter’s day is probably not going to help you in terms of building your investment strategy. You need to remember to look at it like a business. Never, ever fall in love with your investment property. All that love should be focused on your own home instead.
Following on from that, you need to be prepared for a loss or potential damage to the property. I set myself aside an amount each year to help cover these losses. This is where it can get really tricky if you love the home you are renting out. Any damage done to the property will be that much harder to deal with.
Tip number two. Start of slow – like I did. Then, when you get enough experience and you know exactly what you’re looking for, you can move really quickly. I’ve managed to get this down to a fine art. I can walk in, inspect a property, make up my mind and make a cash offer. Getting in and out before others have even decided where they might like to hang the painting they got as a wedding gift. This way, you get in before everyone else. But as I said, start slow, it takes time to get to where I am.
And tip number three. Remember that any property is a long term investment. Most properties will double in value every seven to ten years, even faster in places like Auckland. You will never be able to save as fast or as much as the capital gain on a property, if you buy well. So, once you have that property, and you’re able to afford it, hold onto it. Only sell if you have to. That way, when you actually need the money, it will be there waiting for you.
And that’s it. My top three tips for finding the perfect investment property.
Joanne Chen is a Business Development Manager at Squirrel Mortgages. Visit squirrel.co.nz.