Buying an investment property can be incredibly rewarding. But finding the right real estate requires a bit of legwork, and some first-time investors are getting frustrated with misleading property descriptions.
Misleading property descriptions bug buyers
While Australians generally feel relaxed about investing in property, many are expressing doubts about real estate agents’ property descriptions — in fact, this is their greatest “pet peeve” when hunting out the ideal rental dwelling, according to the RAMS First Time Investor Survey 2014.
“After all, buying a property is not just a financial commitment — it is also a big investment of your time, and misleading listings can be discouraging and frustrating,” Martine Jager, RAMS Chief Executive said.
Jager explained that first-time investors are becoming increasingly savvy and are taking advantage of tools — such as home loan calculators — when making their purchase decisions. With a wealth of information available online, it’s likely that would-be buyers will be quick to spot differences between a property’s description and its actual state.
What are the offending phrases?
There were a few key culprits when it comes to misleading property descriptions.
The phrase “hot property” is firing up first-time investors, but not for the right reasons. Equally, “renovator’s dream” is a huge bugbear for would-be buyers. The third most-hated property description is “water glimpses”.
When buying property for an SMSF or as a general investment, it’s feasible that everyday Australians don’t want to spend countless hours fixing up decrepit rental properties. For this reason, properties that are ready to be tenanted and don’t require extensive long-term maintenance are often a hit with investors. Established, small suburban houses are the most favoured investment dwellings. Next comes established small suburban apartments, followed by established small apartments in the CBD.
Other than blatantly outlawing these offending phrases, Jager suggested that transparency is the winning strategy.
“More realistic property descriptions could be a way to attract more first time investors into the market,” Jager said.
Ways investors can find the right investments
Finding the right investment property requires dedication, but a focussed effort can pay off in the long run.
First-time investors should attend plenty of open inspections to get a feel for what’s available across various suburbs, as well as reviewing capital growth, vacancy rates and rental yield figures. While a property description can entice buyers to check out a dwelling, it’s the predicted growth rates and other statistics that will determine whether or not it’s a smart investment.
Speak to a real estate agent who specialises in investment properties. When discussing your ideal investment don’t shy away from detailing exactly what you are looking for and how much you are willing to invest. The more information you provide your agent with, the better they will be able to service you needs.
Careful budgeting is mandatory, as well as paying close attention to what tenants in a particular area are looking for.
Once you’ve completed a thorough analysis and looked at your home loan options, you’ll be able to establish whether that hot property with water glimpses is really worth it.