How To Tell If An Investment Property Is A Good Buy
For most Singaporeans who are not CEOs, heart surgeons, ministers, investment bankers or popular artistes, there are two major ways of getting rich –winning a lottery or buying a Singapore property and hoping that its value skyrockets. Property investment is one of the most common ways to grow money in Singapore. There are very many types of investments and there are also very many types of properties and so much information available online that you can look at to determine where and what you want to invest in.
Choosing the right property however can be a challenge to many investors particularly if you are new in the industry. You want to purchase property that will increase in value steadily. Various reports have confirmed that the location and the condition of the property are a major concern when determining whether a property is worth your time and resources or not.
While price also matters, finding properties that can be overhauled with little effort may not be so easy. Anyone who has bought a house with intentions of fixing it knows that there might be challenges and problems that come up without the least of warning. Discerning a home at first glance to decide if it’s worth the investment requires keen eyes. So, what are some of the hints or ideas that you could use to determine whether a property is worth investing in it or not?
Determine whether it meets your objectives
Making decisions based on your real estate investments is the foundation of of your strategy. So, it makes sense that your first priority meets your expectations. How much is it going to cost you and how much are you going to pocket and are you happy with that?For instance, if your objective is to make S$300,000 per month, in the positive cashflow, you need to find a property that makes such an amount or more. Normally, it would be easier to obtain such amount—positive cashflow from a multi-unit property. It could be complete rental property or a commercial bolding.
Check the growing market
If theproperty meets your objectives, the next phase is checking whether its market s growing or collapsing. Is the area growing? Are there constructions going on around? Is there a company moving in? what are the land rates and property prices around are they rising or falling? Are there new roads coming up, hospitals, schools and public transit lines and lastly is there a population shift in the area where the property is located? Some of this data can be easily found in newspapers and online materials. You can dedicate a few hours of your time for such details in order to assess the market growth of the property.
Government websites can be a good source of information but may not be accurate unless update to the latest data. Check municipal and city data a long with state and provisional websites and search for census information, including the average person per household, number of households, the number of schools, the number of children and the household income.If the information you get quite satisfies you, then you may go ahead and do the paper work since there is a possibility that the property value will increase.
Assess the area
Don’t rush purchasing a property that you may end up regretting. The location and the neighboring activities massively determine whether the property value will increase or decrease. If you don’t want drama with your property, you better purchased it from an established area. If you intend too rent out, you want a property where electricity, water and other basic necessities are available. People live among people.Therefore, you are not going to buy a property that has no neighborhood. In any case, a sparsely populated location is dangerous and tenants are likely to leave or reject renting an apartment that is too far from the city.
From the previous point, if you have assessed the market value and decided that the property market will grow, then there is a probability that your property will get rented. Bad areas attract difficult tenants and your property will likely go down value wise which will be difficult to sell it later. Aim at targeting an area that is growing. There are very many signs to indicate that particularly if there are people living around. Huge supermarkets, new roads, clean up yards, constructing of buildings, people removing homes, development of parks and people buying land are just but a few of the indicator signs that the area is growing.
Check the property sales and prices
Sometimes it is wise to mark the area that you want to purchase your property from and go around checking the rates of other properties. Knowing a good property investment means ensuring that you don’t pay exaggerated amount of money or pay too little. A good investment must be properly priced. The price should range around the same value as other similar properties. If the property is underpriced, you should establish why it underpriced because there must be an underlying hidden issue prompting such price.
Property purchase requires you to be quite vigilant and do your homework early. If you don’t want to go the long way of checking other property prices and comparing, then the most suitable and easier way is finding out what the previous price was. It is a tricky subject as it will require you to identify the growth rate in the area. If this is not any easier for you, then hiring someone to do if for you could be the ultimate price. Third party valuation on the property is also a great idea. Keep in mind that growth rate greatly determines the price of a property. A quickly growing area will have its property sold at a higher rate than properties in an already developed area or a slow growing area. Also bear in mind how long the property has been on sale, if the property has been on sale for the past 6 months or so means that the price should be a little low than the marked price. Bargain as much as you can.