Our experience in the investment property market in Perth has been that knowledge is power. If you don’t have knowledge, you are relying on blind luck to succeed in the market. Luckily, it doesn’t have to be your knowledge. It’s just a matter of asking the right questions to the right people. This is especially true when looking to purchase a property with potential for development.
Questions for Development Properties
When you are planning to purchase a property with development potential, it is crucial that you know exactly what your options are. You need to know whether or not you can subdivide or how many units you can put on the land and how much it is going to cost you to do so. This includes not only building costs but costs of approvals, purchase costs, holding costs and selling costs.
This will tell you how much you can afford to pay for the property.
One of the biggest mistakes buyers make is asking an agent questions that may help that agent uncover hidden potential for the property. Remember that unless you have a buyer’s agent, the agent’s fiduciary responsibility is to the seller. You could end up asking a question that causes the agent to recommend that the seller raises his price considerably.
Even if you have a buyer’s agent, the world of multiple dwelling approvals for apartments is a difficult place to navigate without a qualified professional building and subdivision expert. You also need to check with the council that governs the area in which the property is located because their planning schemes have restrictions on what can be done in a given area of the suburb.
Scouting the Area
Another thing you don’t want to ask the agent is any questions about the neighbourhood. Instead, ask the neighbours. Usually those who live next door on either side will be full of insight and may even be able to tell you why the seller is selling. Sometimes a small piece of knowledge can save you thousands.
Hidden Maintenance
For any property more than ten years old, don’t trust the agent to give you an accurate assessment of the condition of the property or of any hidden maintenance. Instead, make your purchase subject to your satisfaction with the report from a professional building inspector.
On Agents
It is the agent’s job to represent and protect the best interests of the seller. The only way to combat this is to hire a buyer’s agent. A buyer’s agent will help your purchase of an investment property in Perth go much smoother. In addition, it can save or make you a lot of money.
However, that doesn’t excuse you from your own responsibility to gather as much information as possible and be fully engaged in the buying process.
Questions to Ask the Selling Agent
1. How long has the home been on the market?
2. Why is the owner selling?
3. Where are the sellers moving to?
4. How did you determine the asking price?
5. How much do you think the property will sell for?
6. Are there any negatives I should know about this property?
7. Do you have any written offers yet?
Knowledge is Power
Not only is knowledge power, but it is money, too. Any piece of information can save or make you money. Remember: in property investing, every stone you leave unturned can cost you money.
We Can Help
At Investors Edge, we can provide straight answers to your questions. We can also help you find the right property for your specific situation. To learn more, contact us on 1300 472 427.
