15 August 2016 Tips for buying your investment property With increasing population growth and demand for housing accommodation well in to the future, it makes sense that you consider real estate as one investment strategy available to you to secure your own financial wellbeing. Becoming a landlord can be an exciting step forward, with opportunities to create capital growth and enhance your investment over time. However, buying a property without knowing its condition or potential is a high risk investment strategy that can have long term implications and can result in investors actually losing money from the outset. Pre-purchase inspections can often uncover some form of illegal building, which could leave you as the potential landlord exposed to health, legal and safety hazards and have significant impacts on your investment. The most dangerous situations are where people have undertaken illegal wiring, plumbing, structural changes or the construction of balconies and decks on the properties. In many cases, the landlord is forced to pull down or rectify these. These costs are unforseen and may need to be financed by extending the mortgage, which is hardly a great start to your investment. It can also interrupt existing tenants or create periods of tenant vacancy, resulting in a lack of rental income. This is where bringing in professional design expertise before you purchase a property will potentially help you avoid making a poor decision and costly errors. People can actually devalue their investment through poor decisions, plans and designs. This could result in providing a negative cash flow for the investment and poor re-selling options. Assessing the potential is a vital step before buying the property. It should provide you with a rough idea of how much you should pay for the property, the planning / building regulations you will need to comply with, the cost of improvements and the likely return you will get from your spend. 7 tips for purchasing an investment property include: Purchase a property that is structurally sound. Assess the financial potential with a design and cost analysis before purchase. Ensure a well-designed, accurately costed feasibility study is prepared before committing to the purchase of the investment property. Check the planning regulations to avoid costly planning appeals. Utilise design that delivers lifestyle requirements being demanded by the market. Select a design where additions are compatible with the existing structure. If applicable, obtain competitive building or sub-contracting quotes.