Buying an investment property in Australia involves several steps. In this blog, we compare the traditional step by step process of buying an investment property compared to the PropHero process. We may be biased, but we think you’ll be able to see the clear difference very early on!
The traditional process for buying an investment property
Step one: Define your investment goals
It’s important to clarify your investment objectives, whether it’s rental income, capital growth, or a combination of both. You’ll also need to consider your budget, risk tolerance, and investment timeframe.
Step two: Financial preparation
Assess your financial situation and determine how much you can afford. Once you have a clear view on this you can obtain pre-approval for a mortgage to understand your borrowing capacity.
Step three: Research the market
Start identifying potential locations for investment by researching property markets, growth areas, and local amenities. Consider factors like population growth, employment opportunities, and infrastructure development.
Step four: Engage professionals
You’ll need to hire a real estate agent to assist with property searches and negotiations. They are the middleman between you and the seller, so they’ll be critical in helping you land the right property. You’ll also need to consult with a mortgage broker to find the best financing options.
Step five: Property inspection
Conduct thorough inspections of potential properties to assess their condition and identify any issues. This will need to be done to ensure you’re making a safe investment and are part of the traditional process for buying a property. The building and pest inspection report should be a key part of your decision making process.
Step six: Legal and due diligence
Engage a solicitor or conveyancer to handle the legal aspects of the purchase. Conduct due diligence on zoning laws, property titles, and any restrictions that may affect your investment.
Step seven: Make an offer
Once you find a suitable property, make an offer. Negotiate the terms and conditions with the seller.
Step eight: Contract of sale
Once your offer is accepted, a contract of sale is drawn up. Review it carefully, and seek legal advice if needed.
Step nine: Secure financing
Finalise your mortgage arrangements and obtain formal loan approval.
Step ten: Settlement
Sign the contract and pay the deposit (usually 10% of the purchase price) upon exchange.
Settlement is the final stage where you pay the remaining balance, and legal ownership of the property is transferred to you.
Step eleven: Property management
If you’re planning to rent out the property, consider hiring a property manager or managing it yourself.
Step twelve: Ongoing management
Stay informed about the property market and monitor your investment. Consider periodic property valuations.
Step thirteen: Portfolio tracking
Ensure you track the performance of your property regularly to see if it’s meeting either your capital growth or cash flow goals.
PropHero makes investing in property quick and easy, while also ensuring you maximise your profitability.
Step one: Getting pre-approval
Before engaging with PropHero, it is recommended you get pre-approval so you have a clear picture of how much you can spend on a new investment. Once you have this, we can take you to the next step.
Step two: Engage and discovery
Our team will work with you to identify your investment goals and strategy. It’s critical for us to understand where you want to be now and in the future and how property investing will play a role in this. We’ll develop an investment strategy for you and then you’ll go onto the next stage.
Step three: Property search & settlement
Our team will then search for the right property just for you, and we’ll present properties we recommend with all the details you need. We’ll conduct all the checks and due diligence for you including building and pest inspections and getting the building reports. Once you’re happy with a property we share with you, we’ll take you through the settlement process and introduce you to all the partners you need.
Step four: Post-settlement portfolio checks
Once you’ve settled a new property with PropHero, we’ll undergo regular portfolio checks with you to ensure the properties you’ve purchased with us are performing, and to identify opportunities you may want to invest in.
And that’s it! Working with PropHero to get your next property investment isn’t just easier than using a traditional buyers agent, we’ll work with you to ensure we can help you meet your long term financial goals now and into the future. So why wait? Reach out to our team today to get started.