Growing a property portfolio takes hard work, long nights and sadly way too much stress, as most worthy things do. This process can however be made easier and less stressful, by ensuring you did you planning and research well. That you were honest with yourself in what you can and can not do, in a realistic manner of course. Choosing the correct property for you will depend of your needs, wants and requirements. Take the time to make sure you buy the correct property for you.
Consider this thought process with any kind of property you choose, be it residential (house/apartment), commercial or industrial.
1.Start with pen and paper.
- Ask yourself why do you want to buy property?
- Why do you want to buy this kind of property?
There are many types of propeties and each of them comes with their own pros and cons. Will your property be to live in, do you want to make extra rental income, do you want to be a landlord.You need to be honest with yourself when answering theses questions.
- Will a different kind of property with different aspects not be better (think outside the box and truly consider alternative methods)
- What can you afford, what do you want to afford and what compromises can be made.
- What are the needs and requirements of the property.
- Are you willing to consider fixer uppers, because you should consider the repair/remodelling cost into the property cost.
2.Start with a completed online search.
While searching you can add yourself to mailing list on certain property sites. Use tools such as Google Street View and Google Maps. With these tools you should be able to get a much clear understanding of the property and the general neighborhood.
- Check local amenities
- Schools (Public and Private)
3.FreeHold or LeaseHold
Considering properties in Estates can have their benefits, but one shouldn’t underestimate the cost of these benefits.
4. Visits are fieldwork research
Consider your first visit as a fieldwork research exercise, not as a fun outing out. Start the moment you drive into the neighbourhood to the moment you drive out of the neighbourhood.
- Consider the streets, the neighbours, the community.
- Consider the Kerb appeal of your property and your direct neighbours. This will give you some indication of the neighbors you may have.
- Consider the structure of the property, it’s bones.
- Damages like cracked walls (and what kind of crack walls) are important
- Check Attics and Basements. Water in a basement could be a problem
- Check for general water damages against the walls and ceilings.
- Check the bathrooms. Mould could be hiding here, causing water damage in the long run.
- Check the switch board for the electrical wiring. This can be a costly expense with commercial and industrial properties.
You will also gain a lot of insight in visiting your potential new neighbourhood at night.
Go have a walk in the neighbourhood, it’s the easiest way to get a feel for the community.
Taking a friend along, can give you an objective set of eyes. We often have a way of over romanticising exciting moments in our lives. I personally live for these moments, but in business one has to stay clear headed of reality.
If you are considering a fixer upper, then it would be a good idea to take a contractor and electrician with you on your second viewing. This will give you an excellent idea of how much the property will actually cost.
6.Consider the true financial implications.
- Transfer Duties
- Lawyers cost
- Mortgage Bond Initial Cost
- Monthly mortgage bond + Monthly maintenance of the property + Monthly Insurance
- Wooden floors might need to be polished from time to time
- A pool will increase the electric bill, not considering how much chlorine cost.
- A thatch house makes heating difficult in winter
- A big garden might require a semi-permanent gardener.
- Estate Agent commission, give it a check
- Taking a Contractor and Electrician with on the second viewing
- If there is an empty land close by it would be wise to know what that land can be used/sold for. The local municipal office can tell you where to find out about all developments in the area for the past and future.
8.Checklist, they work
Making notes and having checklist aren’t a bad idea, especially if you require a very specific kind of property.
My husband and I made a checklist of what we wanted our residential home to achieve for us. One of the biggest goals was that we should choose a property with rental potential, thus garden cottages became a wanting aspects. We even went as so far as to evaluated the type of rental space each property would allow.
- Would we have to share a driveway?
- Would the rental unit be far or close to our home?
- Could the garden be divided into smaller private areas?
I can honestly say that a bit of pre-thought of what we wanted from the property and why, made it much easier to see if this is our next home or not.
Keeping a clear head, with a set of goals will make property hunting a lot easier and less confusing. Don’t get over romantically involved with a property. Properties comes and goes, what’s important is that you ensure you are making a financially smart choice as this might be your most expensive investment in life.
Also keep in mind that after you bought your new investment property that Mafadi Property Management is an ideal option for managing your property portfolio, ensure our best return on investment.
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