By REIWA President – Damian Collins https://reiwa.com.au/
Property investment remains a very attractive prospect in Western Australia. With the Perth rental market in a recovery phase and housing affordability continuing to improve, there is plenty of opportunity for WA property investors to capitalise on these favourable conditions.
When it comes to property investment, the vast majority of landlords in WA are ‘mum and dad’ investors using property investment as a means to secure their future, not savvy moguls with multi-million dollar portfolios. As such, most investors aren’t in the market enough to know everything there is to know about buying an investment property. There are a number of pitfalls that can befall the typical investor if they aren’t properly prepared.
Negotiating is one area that many investors dread. Strong negotiating can be crucial to maximising your profit, however, it’s also an easy process to get wrong, especially when you’re negotiating against an experienced selling agent who is working on behalf of their client – the seller.
Arguably the most important bargaining chip you can have when entering property negotiations is in knowing the worth of the property you are investing in. This will form the fundamental starting point of your negotiation strategy by helping you determine what you should offer for the property (and the maximum you are willing to pay).
In addition to preventing you from overpaying for a property, knowing an asset’s value can be the key to helping you identify high potential opportunities when they arise. If, for example, you know a property is listed on the market at a fair price, this knowledge will put you in a stronger position to quickly make a competitive offer on the property before others, in turn increasing your potential for success during negotiations.
Emotional purchases’ are also something you should avoid when investing. It’s really important to assess a property objectively and remain level-headed during negotiations. You need to know when to walk away from a deal and look elsewhere.
One of the ways you can reduce this emotional investment is to research the market and have alternative properties in mind as a secondary option.
If you’re not confident in property negotiations or don’t have the experience and knowledge of the market to support your investment decisions, you may want to consider engaging a professional.
A REIWA buyer’s agent can research properties and negotiate the purchase process on your behalf, with the benefit of local agent knowledge and ongoing experience in the property market.
Having access to this objective and informed third party can give you a huge advantage during the negotiation process, helping you to avoid costly mistakes and to make the smartest financial decision.