A lot of investors expect to make additional money when they purchase a property – after all, capital growth is one of the main reasons people invest in residential real estate. One of the myths that prevails amongst property is that the value of a property will double every seven to ten years – but many won’t!
Here’s how to check if your property is worth the investment before you buy:
- If it is appealing to owner occupiers, other similar properties will probably have been bought, pushing up the value of local real estate.
- Avoid new and off-the-plan properties by buying below intrinsic value
- If there is a high land to asset ratio, land will make up a significant part of the value of the overall property
- It’s in an area with a long history of capital growth and will continue to outperform the averages.
- The property has something unique, special or distinctive about it.
- If renovations or refurbishment can help boost the value of the property, rather than purchasing a ready-to-go property that might lose value in the future market.