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11 Things To Look Out For When Buying A Property

It’s not just about the price.

 

Buying a property is a big decision.

For most of us, it is likely that we would have to service the loan we’ve taken out for the property for the rest of our lives. Even if we can afford to invest in multiple properties, each investment is still a big decision and would require a significant amount of capital.

Read Also: Taking A Loan Vs Paying In Full: Which Is Better?

Here’s a quick checklist to help prospective property owners with each new purchase.

#1 Reputation Of Developers

Before making a property purchase, it is important to first do some research on the reputation of the developers who developed the property. This is important because some less reputable developers are known for regularly being late on completing their projects or poor finish quality.

Failing to do so might put you at risk of buying a property that might get abandoned before it is being completed, face lengthy delays or get stuck with a property that starts to leak or break down after a couple of years.

#2 The Surrounding Neighbourhood

Besides that, a property’s value is also closely tied to its surrounding neighbourhood.

If it is a commercial property, its surrounding neighbourhood would affect the kind of crowd businesses could attract, which would affect the quality of business tenants a property owner could get for their property.

If it is a residential property, the safety and make-up of the surrounding neighbourhood would also affect prospective tenants’ decision on whether or not to rent the property. If you plan to stay at the property yourself, you should make sure that you like the neighbourhood you’re staying in.

Read Also: How Should Age Affect Your Investment Portfolio And Strategy?

#3 Traffic During Peak Hours

Traffic conditions when you’re viewing the property might be misleading. To truly find out how congested or smooth the traffic around the property you intend to purchase is, it is important to observe the traffic around the area during peak hours, during the times at which you or your future tenants would most likely commute to and from your property.

#4 Future Development Potential

The future development potential of the area that your property is situated in would also affect the rate of appreciation of the price of your property. If the area is a growing neighbourhood with various big developments already in progress or coming up in the next few years, it is probably a good bet.

However, it is important to note that it is dangerous to buy a property in an area that is too remote with future developments that are still a long way away. They might never happen and you might be left with a property in a ghost town. It is advisable to go for properties in areas that are already well-developed with the potential to be developed further. It might take some time for a new area to get established and attract good tenants and residents.

#5 Convenience And Facilities

The availability of public facilities like parks, schools, commercial areas and access to major roadways are also important factors to consider when purchasing a property.

#6 Management Team

If the property is a condominium or a serviced apartment with a management, the quality of the building’s management team is also important because a bad management team can mismanage the property and cause the building’s facilities to deteriorate over time, causing a drop in the value of the property.

#7 Property Prices Around The Area

To make sure that you are getting a good deal, it might also be wise to compare the prices of similar properties around the area. That would give you an idea of whether you are getting a good deal on you unit or not.

#8 Piping And Build Quality

If the property you are getting is already completed, it is important to inspect the piping and build quality of the unit because piping leaks and poor build quality can lead to many problems and high maintenance costs in the future.

If the property has been around for years, you can ask neighbouring owners whether they have started to face any such problems.

Read Also: What Can Banks Do If You Don’t Pay Up?

#9 Nature Of Property Title

Commercial titles come with higher utility bills than residential ones. Freehold and leasehold properties also have their differences that might affect their values decades later on or when you decide to resell your property in the future.

Read Also: Freehold Vs Leasehold: What’s The Difference?

#10 Rentability

If you are investing in a property for passive income, then the rentability of the property becomes very important. The property must be in a good condition while being affordable enough to attract the type of tenant that you are looking for. Additional parking and proximity to public facilities such as train stations can be a huge plus point for such properties.

#11 Location, Location, Location.

In the end, when it comes to properties, it’s all about location.

Many of the factors mentioned above are also closely tied to the location of the property. As long as the property you’re buying is located in a good location, it is likely to satisfy most of the factors mentioned above.

Once location is sorted out, you’ll only have to make sure that the build quality of the property is good and that the price is right.

Read Also: What I Wish I Knew Before Investing In Property

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