If you’re thinking about setting up a portfolio of properties for yourself or just adding to an existing one it always just comes down to numbers. You want to buy the highest returning property for the cheapest price and the more you can save on price the stronger the yield.
First things first, have all your money sorted out. This means, speak to you finance people, whether it be brokers or banks and get yourself into a position to buy. You want to be in a situation which you can make an unconditional offer, so us much as the banker or broker will always suggest to use the finance clause in your purchase, make sure you have the relevant information for you to feel confident to make an unconditional offer. Once your money is ready, then you can start your hunt.
The most important thing to remember is that patience is key when looking to build your portfolio. You don’t have the same pressures as buying the family home, so just take a breather and understand that there are always opportunities. Also keep in the forefront of your mind that what you’re looking for doesn’t have to be pretty or what you would live in, you are looking at numbers and there is no time for any emotion. The only due diligence you need to do is study the growth in rental history, sale history and whether the property is coming with more maintenance issues then it’s worth.
So the first thing I would do is go to all the portals like Domain or Realestate (.com.au) and search suburbs that you’re interested in investing into. When all the properties come up then change the filter above all the listings from ‘most relevant’ to ‘oldest listing’. The reason why you want to start here is because in most cases, these properties have been sitting online for a while, the agent has given up and the owners are frustrated.
Now just like anything, it’s a numbers game, you want to find properties that you think are suitable, speak to the agent and see which ones will work for you rather than their owner (the agent most keen to just make a commission) and then start inspecting and making ridiculously low offers. It’s a process and you must remain patient, but every now and then, no matter what market we’re in, there’s always someone who needs to sell for whatever reason and will either accept or negotiate on a low offer.
Other places to hunt for properties would be in selling sites such as gumtree, the trading post or for sale by owner. In most cases you will be dealing with the owners direct, this is a little tougher because there isn’t a third party to help you negotiate them down, though owners aren’t the best negotiators either. They are to emotionally invested and start off hard, though depending on their circumstances, will drop their price a lot more and a lot quicker once money starts to look real.