IMPORTANT QUESTIONS YOU NEED TO ASK

In my dealings with residential property investors the following are a range of questions these type of investors have found to be a must to find answers to:

• Important for investors is what cash flow will be generated from this property?
• What is the vacancy rate of the area? I recommend you visit www.reiaustralia.com.au .
• What improvements are being planned for the area? Not all are positive so be careful.
• What is the population growth? Zero or negative growth is usaully a bad sign.
• Is the property tenant friendly?
• What condition is the property in? I recommend you pay for a pest and building inspection and remember it's tax deductible. Pest inspections range from $160 - $260. Building inspections range from $300 - $500. Visit www.archicentre.com.au to organise either or both inspections.
• Is there an owners corporation? If there is, then you should carry out an owners corporation search.
• Is there a rental guarantee? Remember, a guarantee is only a promise and has no regulatory backing.
• What is the current property management arrangement? What does it cost? Does it work well?
• In the case of a new or off-the-plan purchase, who is the developer?
• What is the land availability in the area? Scarcity will lead to higher prices.
• Is it close to a large city? Make sure it's easy to get to the city with private and public transport.
• Is the property at market value? Visit the Australian Property Institute on www.api.org.au and click on Api-Divisions for a list of valuers in your area. Expect to pay up to $500 for a written estimate. Another alternative is to buy price guides for the areas you like. www.homepriceguide.com.au provides a list of prices paid for specific houses or units in any postcode for 12 - 24 months. Costs range from $85.