Thinking like a homebuyer when buying your first investment property could save you a lot of cash.
You and I have been told that one of the worst mistakes aspiring investors make is to do it on their own.
We’re told that DIY-ing it would lead us overpaying and buying the wrong property.
Having a property expert, advisor or buyer’s agent will prevent this from happening. That’s simply because they have the experience and knowledge that we lack as beginner investors.
Admittedly, I used to believe it too and even preached it when I was the Managing Editor at Your Investment Property. I even used them myself.
But I started my investment journey doing it on my own.
Recently, I started receiving emails from first-time investors asking me how to confidently start investing without paying a hefty $15,000 fee for a buyer’s agent’s service.
They want to know reliable ways to assess a property with good potential. On their own.
So it got me thinking…
Long before buyer’s agents, advisors, coaches and experts became a “necessity” for an aspiring investor, people were doing it by themselves. And quite frankly, they’ve done quite well on average.
So how did they invest way back then?
It’s simple. They invested like a homebuyer.
Think like a homebuyer and save $15,000?
It’s a radical thought. But hear me out.
If you already bought your home and want to buy an investment property next (because your friends and everyone you know are already investing) then you’ve already got the requisite experience.
You’ve been through the whole process. You can use this to your advantage.
So how do you apply this mindset when buying an investment property?
Research as if you’re buying your own home.
As a homebuyer, you’d only buy in areas that you know very well. If you’re not very familiar with the suburb, you’d spend a lot of time scrutinising and learning everything about it.
You don’t just rely on the information you get from the internet or from the agent. You actually go and visit the area. You look at every street and try to figure out what makes it tick. You look for signs that it’s a safe place.
You also check out the people who live there. What are they like? Are people moving in the area? Why? If the opposite is true, you’d find out why.
You look for lifestyle factors. What amenities are available?
Are there good infrastructures such as transport, shops, schools, parks and other amenities that make for a good lifestyle? As a homebuyer, you check that the area has all these and more.
If you apply the same rigour when looking for an investment property, you’re already well ahead.
Inspect the property as if you’re going to live there.
When you attend open homes as a homebuyer, you look for features that would make the place not just liveable but also desirable.
You scrutinise the size of the rooms, the natural lighting and the overall layout and structure of the place.
A lot of investors forget that people want to live in a nice, comfortable home and tend to just focus on the numbers. Then they wonder why their property is always vacant.
That’s why thinking like a homebuyer can be helpful when choosing the right property to buy.
It’s not about whether you want to live there but whether other people like your potential tenants or buyers would want to.
Buy the best property you can afford.
As a homebuyer, you want to buy the best home you can afford. You’re careful not to overextend because you don’t want to lose the family home.
So you strike a balance of picking the best property that you could comfortably support for a long time.
By being able to hold a quality property over the long term, you’re dramatically boosting your chances of making handsome profits when you sell.
Keeping it simple is the key.
As you can see, you don’t need fancy apps and spreadsheets to know you’re buying a good property at a reasonable price.
You just need to get back to basics and remember that people will be living in your property. Know what’s important to them and buy the property that meets that need.
You’ll also be saving yourself a hefty $15,000 in the process.
If however, you feel stuck and need help to move forward, by all means, get a coach or a buyer’s agent.
Just make sure they’re truly independent and reputable.
May your investments be profitable, Always!