5 tips for buying a property in a hot market
Buying an investment property comes with a plethora of research and steps. Buying an investment property in a hot market when everyone else wants to do the same is even harder.
So what can you do?
The trick to buying an investment property in a hot market is to be on the lookout and ready to buy when something comes up. At the end of the day, there are likely to be a bunch of other buyers in the same position as you and it’s up to you to find the best property, make an offer and settle before someone else snatches it up!
Buying a property in a hot market can be very intense and for those buyers who are not experienced in the intricacies of buying real estate it can be very daunting – Empowerwealth
But before we jump into the tips, let’s make sure you have everything in order to purchase an investment property:
- What are you trying to achieve?
- Create an investment plan and strategy
- Understand a great property investment
- Cover the risk
If you haven’t already, make sure you head over and read our blog on the 5 Things To Consider When Buying An Investment Property.
What is a ‘hot property market’?
There are a number of indicators that you can use the determine whether a market is hot or not.
- Prices of properties in the area
- Demand for properties in the area
- What real estate agents are telling you
- Look at the history or the market in that area
- Infrastructure and new developments in the area
There is no single indicator for a hot market, you will just have to keep your ear to the ground and conduct your own research.
- People are very excited about the area.
- Properties don’t last long once they are listed.
- Vendors are receiving their asking price or even more.
So what are the 5 tips for buying a property in a hot market like Melbourne?
1. Be prepared – get everything ready
Make sure you’re prepared to buy. Organise your finances, deposit, review the contract early, get a building inspection done and don’t waste time getting papers signed!
The most important thing to have ready is…everything! A hot market means that decisions are made quickly which doesn’t leave you any time to be running around trying to get approvals and papers signed. You want to make sure you have everything ready to go.
- Get finance pre-approved.
- Having your solicitor and building & pest inspector on standby.
- Be ready to inspect properties with late notice.
- Have your buyer agent ready if you are using one.
2. Be flexible
Be flexible with location if prices rise fast in your ideal location.
It’s important to have your eyes set on a certain location, otherwise, you’ll be spending endless days researching every possible suburb that could be hot! It is important to know that you might not get a property in your ideal location. So it’s good to have some backup options and know what is going on in other areas.
Create a list of your most ideal locations and then 5 or so locations below that. Make sure you draw the line somewhere, you don’t want to be pushed out of your top 10 locations and end up with something you really didn’t want.
3. Be Clear
Get clear on what type of property you want, the slower you are to research, the higher the prices are potentially going to be.
If you have a clear understanding of what property you want, you don’t have to waste your time looking at anything else. Obviously, you can’t be too picky, but if you are looking for a house, not an apartment then you are going to halve the potential property listings you need to look at.
A hot market is a HOT market. This means you need to act fast and decisively, there’s not a lot of time for mindless research. Be clear on what you want and stick with it.
4. Be proactive
Ask around. Talk to agents for listings that are coming up soon to get the first look, don’t hesitate if something good comes up, take action, be proactive.
A hot market can be pretty intense. When so many people are actively looking at property in one area, property listings won’t last long. If you aren’t proactive, someone else will be and they will get the property you want.
This means you need to be on the ball as much as possible. Create connections with local agents, set notifications on real estate listing sites and subscribe to emails. Once you see a property that ticks all of your boxes, take action as fast as you can. If there aren’t any inspections listed, ask the agent for private inspections. At the end of the day, the seller wants to sell their property and you want to buy it. The easier you make it for the seller, the more likely you are to come out on top.
A hot market is no place for indecisiveness. If you need to take a few weeks to make a decision about a property, you’re going to miss the boat. If there is a property that ticks all of your boxes then you need to act fast.
Don’t leave home without a blank cheque and don’t be too cute with offers – Michael Yardney
This also means that you should make an offer before the auction. If the seller is ready to sell and you have the funds to buy, why wait till auction?
5. Be Smart
Don’t take unnecessary risks because you are impatient.
At the end of the day, understand that markets go up and down, so other opportunities may arise in the future. Keep your emotions in check to protect yourself against taking on too much debt and pushing yourself too hard.
We have heard endless stories of people who have wanted desperately to buy in a hot market but have actually missed the boat and ended up with a property that they didn’t want at a price that was way over their budget. Just remember that there will always be another time to buy and there will always be more properties. Don’t settle for something just because you are impatient.
- Be prepared – Make sure you’re prepared to buy. Organise your finances, deposit, review contract early, get a building inspection done and don’t waste time shuffling papers.
- Be flexible – If prices rise fast in your ideal location have some backup areas that also fit your budget and property type.
- Be clear – Get clear on what type of property you want, the slower you are to research, the higher the prices are potentially going to be
- Be proactive – Ask around agents for listings that are coming up soon to get the first look, don’t hesitate if something good comes up, take action; if you don’t, someone else will!
- Be smart – At the end of the day, understand that markets go up and down, so other opportunities may arise in the future. Keep your emotions in check to protect yourself against taking on too much debt and pushing yourself too hard.
If you want to learn more about purchasing a property, please don’t hesitate to give us a call. We have a lot of experience in Melbourne property and we understand how to navigate a hot property market. We are here to help and we’re only a phone call away.
Want to read more? Check out some of our other posts:
- Best Suburbs In Melbourne To Invest In 2021
- 5 Things To Consider When Buying An Investment Property
- Rentals Vs Airbnb: Using Airbnb As An Investment Strategy
- 5 tips for buying a property in a hot market