Not all property markets around Australia are performing strongly.
While the Melbourne and Sydney property markets would be classified as seller’s markets, there are many regions you’d call a buyers market.
Purchasing an investment property in a buyer’s market can be a spring board to significantly growing your wealth.
Here are 5 tips to help investors make the most of favourable market conditions
Buyer’s markets are an opportune time for investors to start or build their property portfolios.
Typically, in a buyer’s market there will be more properties for sale, fewer buyers and values may have softened.
While these factors provide favourable market conditions for property investors, to fully leverage these benefits here are 5 tips you must remember.
1. Secure finance pre-approval before starting your search for a property
Although there are generally fewer buyer’s in a buyer’s market, competition can remain tight in some segments of the property market or for some property types.
By organising finance pre-approval, you’ll be in a much stronger position to beat any other buyers.
2. Don’t necessarily jump at the first property you find
As stock levels increase in a buyer’s market, investors will inevitably have more choice.
To help you secure the best deal, determine the type of property you want to acquire (i.e. development site, established house etc) and compare similar properties before making an offer on a property.
3. Don’t rely on the whole market to rise
Never assume you’ll make a profit by simply acquiring a property in a buyer’s market and selling it during the next upswing.
Make sure to complete sufficient research and purchase an investment property in an area that has strong growth fundamentals.
4. If you’re ready to buy, don’t delay
Many investors, too often, sit on their hands and wait for the property market to start rising again.
However, by that time investors would have missed out on capital gains and may have to pay more for a property.
5. Weigh contracts in your favour
Property investors will have greater negotiation power in a buyer’s market, and should demand favourable contract terms and conditions, such as longer due diligence periods.
You may also want to read: Buyers or sellers market – how do you know?