How to buy an investment property faster – 5 Strategies You Need To Know

Buying an investment property is a great way to generate passive income or increase your monthly cash flow. But if you’re new to the process, it can be a bit intimidating. Fear not; we’ve got your back!

Here are five tips you need to know when looking to buy your first investment property.

Don’t rush the process

While the number of investors who bought their first investment property within a year of getting started is quite low, rushing the process will lead to many potentially costly mistakes. This is because the majority of financing for investment properties is provided by syndicators and mortgage brokers, and these professionals require a certain amount of lead time to secure the best deal possible.

If you rush the process, you risk getting a loan from a lender who will demand a higher interest rate and impose more stringent requirements on your property.

This will significantly increase the amount you have to pay to buy your first investment property and may see you to miss out on a great opportunity.

With that in mind, it’s worth waiting until you’ve made some progress on your investment property journey before rushing in to make your first purchase. This will allow you to get a better sense of the challenges you’ll face and give you more time to prepare for them.

Additionally, it’s important to remember that although the majority of investors make their first purchase within two years of getting started, it’s perfectly possible to wait longer than that.

Seek professional advice

When looking to buy your first investment property, it’s important to seek professional advice. This will allow you to make informed decisions, avoid costly mistakes and reduce the amount of time it takes you to complete the acquisition.

If you’re currently working with a mortgage broker or syndicator, ask them if they can recommend a property or finance source that would suit you better.

Alternatively, if you have a bank or building society you generally bank with, ask them if they can recommend a mortgage broker or syndicator who could help you complete the acquisition of your first investment property.

Conduct a thorough property inspection

Before entering into an agreement to buy your first investment property, make sure you conduct a thorough property inspection. This will allow you to identify issues with the property, such as structural problems before you’ve already committed to buying the property and incur any associated costs.

A thorough inspection will also allow you to identify any potential problems with the property that you can use to negotiate a lower price with the seller. For example, you could point out that there are tiles missing from the kitchen floor, which could cause the floorboards to get wet when you’re cooking, and potentially lead to a hazard.

Set your asking price based on your research

Once you’ve done a thorough inspection of the property, you should be in a good position to set your asking price. However, it’s important to keep in mind that this price is only a guideline.

In reality, there may be a huge amount of room for negotiation when buying your first investment property, which is why it’s critical that you set your asking price based on your research.

To do this, you’ll need to conduct some basic market research to determine the current asking and sold prices of similar properties in the area you’re looking to buy in.

From here, you should be able to determine the asking price for similar properties and use this as a starting point when negotiating with the seller. It’s worth keeping in mind that there are a number of factors that can affect the market value of a property, including the type of area you’re looking to buy in, the condition of the building, and the amount of time the investment property has been on the market.

Negotiate and be prepared to walk away

When negotiating the purchase price for your first investment property, it’s important to remember that you’re not just looking to get the lowest price and the best terms possible. Instead, you should be aiming to get the best price possible given the current market conditions and the amount you have available to invest.

To do this, it’s critical that you keep your negotiation objective firmly in mind. This should be something that you can use to negotiate a lower price on your investment property, such as the ability to use the property as a rental property or to take a lower interest rate.

It’s worth being prepared to walk away from a purchase if negotiations break down. This will allow you to preserve your cash flow and make sure that you don’t fall into a cycle of making bad investment decisions.

Whenever you feel like you’re nearing the end of a negotiation, it’s worth taking a step back and reminding yourself that you’re not a business and that your sole objective is to purchase an investment property at the lowest price possible.

Wrapping up

Buying an investment property is a fantastic way to generate passive income and equity over time, or increase your monthly cash flow. But if you’re new to the process, it can be a bit intimidating.

• Don’t rush the process.
• Seek professional advice.
• Conduct a thorough property inspection.
• Set your asking price based on your research.
• Negotiate and be prepared to walk away.

Happy hunting!