How To Tell If An Investment Property Is A Good Buy

For most Singaporeans who are not CEOs, heart surgeons,ministers, investment bankers or popular artistes, there are two major ways ofgetting rich –winning a lottery or buying a Singapore property and hoping thatits value skyrockets. Property investment is one of the most common ways togrow money in Singapore. There are very many types ofinvestments and there are also very many types of properties and so muchinformation available online that you can look at to determine where and whatyou want to invest in.

Choosing the right property however can be a challenge to manyinvestors particularly if you are new in the industry. You want to purchaseproperty that will increase in value steadily. Various reports have confirmedthat the location and the condition of the property are a major concern whendetermining whether a property is worth your time and resources or not.

While price also matters, finding properties that can be overhauledwith little effort may not be so easy. Anyone who has bought a house withintentions of fixing it knows that there might be challenges and problems thatcome up without the least of warning. Discerning a home at first glance to decideif it’s worth the investment requires keen eyes. So, what are some of the hintsor ideas that you could use to determine whether a property is worth investingin it or not?

Determine whether it meets your objectives

Making decisions based on your real estate investments isthe foundation of of your strategy. So, it makes sense that your first prioritymeets your expectations. How much is it going to cost you and how much are yougoing to pocket and are you happy with that?For instance, if your objective isto make S$300,000 per month, in the positive cashflow, you need to find aproperty that makes such an amount or more. Normally, it would be easier toobtain such amount—positive cashflow from a multi-unit property.  It could be complete rental property or acommercial bolding.

Check the growing market

If theproperty meets your objectives, the next phase ischecking whether its market s growing or collapsing.  Is the area growing? Are there constructionsgoing on around? Is there a company moving in? what are the land rates andproperty prices around are they rising or falling? Are there new roads comingup, hospitals, schools and public transit lines and lastly is there apopulation shift in the area where the property is located? Some of this datacan be easily found in newspapers and online materials. You can dedicate a fewhours of your time for such details in order to assess the market growth of theproperty.

Government websites can be a good source of information butmay not be accurate unless update to the latest data. Check municipal and citydata a long with state and provisional websites and search for censusinformation, including the average person per household, number of households,the number of schools, the number of children and the household income.If the information you get quite satisfies you, then you maygo ahead and do the paper work since there is a possibility that the propertyvalue will increase.

Assess the area

Don’t rush purchasing a property that you may end upregretting. The location and the neighboring activities massively determinewhether the property value will increase or decrease. If you don’t want dramawith your property, you better purchased it from an established area. If youintend too rent out, you want a property where electricity, water and otherbasic necessities are available. People live among people.Therefore, you arenot going to buy a property that has no neighborhood. In any case, a sparselypopulated location is dangerous and tenants are likely to leave or rejectrenting an apartment that is too far from the city.

From the previous point, if you have assessed the marketvalue and decided that the property market will grow, then there is a probabilitythat your property will get rented. Bad areas attract difficult tenants andyour property will likely go down value wise which will be difficult to sell itlater. Aim at targeting an area that is growing. There are very many signs toindicate that particularly if there are people living around. Hugesupermarkets, new roads, clean up yards, constructing of buildings, peopleremoving homes, development of parks and people buying land are just but a fewof the indicator signs that the area is growing.

Check the property sales and prices

Sometimes it is wise to mark the area that you want topurchase your property from and go around checking the rates of otherproperties. Knowing a good property investment means ensuring that you don’tpay exaggerated amount of money or pay too little. A good investment must beproperly priced. The price should range around the same value as other similarproperties. If the property is underpriced, you should establish why itunderpriced because there must be an underlying hidden issue prompting suchprice.

Property purchase requires you to be quite vigilant and do your homework early. If you don’t want to go the long way of checking other property prices and comparing, then the most suitable and easier way is finding out what the previous price was. It is a tricky subject as it will require you to identify the growth rate in the area. If this is not any easier for you, then hiring someone to do if for you could be the ultimate price. Third party valuation on the property is also a great idea. Keep in mind that growth rate greatly determines the price of a property. A quickly growing area will have its property sold at a higher rate than properties in an already developed area or a slow growing area. Also bear in mind how long the property has been on sale, if the property has been on sale for the past 6 months or so means that the price should be a little low than the marked price. Bargain as much as you can.

You may also like to read:

These 5 countries are the top hot spots for property investment in 2018

Location is key aspect for property investment in Singapore

Property Cooling Measures 2018 – 6 Most Important Things You Should Know

(By Molly Joshi)

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