Each buyer’s needs are different. They depend on a number of factors from budget to location. However one of the major key variables that is often overlooked is the buyer’s intent, that is, whether you’re looking for a home to live in or an investment to rent out. Here we’ll look at the differences and what to consider for each.
The number one rule for those looking to invest in property as opposed to live in the home they’re buying, is not to get attached. When shopping for an investment property, try to keep your own dreams and desires out of the picture and stay objective. If you find something you’d love to live in, this doesn’t necessarily make it the right investment property for you. You’re better off considering your needs as a landlord, such as how much maintenance you’re willing to do, and how you can get more rental income from your property.
Crunch the numbers
Whether you’re looking to buy a home or invest in property, you’ll need to perform a different set of calculations before making your purchase. If you’re buying a home to live in, you may be willing to spend a little more for your dream home and pay the mortgage from your work earnings. On the other hand, if you’re investing in property, you’ll most likely pay the mortgage from your rental yield until eventually you can earn an income from the investment. Do the numbers before buying, so that you’re well informed of what you can get for your budget.
Location may be important to you when you’re looking to buy a home to live in, but it’s equally important when you’re investing, for a different set of reasons. Instead of personal taste, work and lifestyle considerations, you’ll want to buy an investment based on your target rental demographic’s needs. Start shopping in the areas you can afford, then look at what these suburbs have to offer. If a university or school is the main attraction, buy a home to attract student renters or a young family. Similarly, if the suburb has professional industries and nightlife, consider purchasing apartments or units that would attract young people and working couples.
When choosing your property type, you’ll need to think differently whether as a home buyer or investment buyer. As a landlord, do you have the time and money for active maintenance? If not, buying new may be the choice for you. As a home buyer however, you’ll want to consider what’s more important to you, having a brand new home that you can tailor to your needs, or living in an established area with amenities and charm. You’ll also want to talk to your real estate agent about how soon you can rent the property out after purchase.
Thinking of buying a new home or investment property? Call Nesters to find out how you can buy for the best possible price through technology.