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What questions to ask before purchasing a property?

Discussion in 'The Buying & Selling Process' started by TyroneS, 5th Aug, 2015.

  1. TyroneS

    TyroneS Well-Known Member

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    18th Jun, 2015
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    Sydney
    Hi PC members,

    Not sure if this question has been covered in the past and if so please share the link.

    Otherwise I'd be interested to hear what you would ask an agent if you are looking to buy an investment property? (mainly for your due diligence and crunching the numbers to see if it's a viable investment)

    Some questions I've been asking if it's not shown on the listing:

    - How much rent is this property receiving or what rental return would I get?
    - What are the rates for this property (council, water and electricity)?
    - Why is the vendor selling?
    - How long has it been on the market for?
    - Any building and pest inspection reports completed recently?

    These are some of the common questions I usually ask. Would love to hear your thoughts or strategies and any other questions you ask?

    -------------------------------------------------------------------------------------
    Start small. Be consistent. And watch massive change take hold.
     
    Taku Ekanayake likes this.
  2. Big Will

    Big Will Well-Known Member

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    Location:
    Melbourne, Australia
    If the property is currently tenanted then I would be interested in the rent it is currently receiving. Otherwise look at comparable properties to give a better indication on expected rent. The REA is unlikely to be a PM so he will be unlikely know what the expected rent is or would use something like 5% yield (400pw for 400k purchase) as it is easier to make it up and it also makes it sound better when it would be closer to 3%.

    How long have the tenants been renting and do they plan on staying?

    - Has there been any offers, why were the offers rejected.

    - What is the vendors preferred settlement.

    - Around other buyers and interested in the property, I think this property has asbestos is it true?

    - If it is a potential development, how many they think you can fit on the block with the LCA along with easements.

    - What price are the vendors wanting.

    - What improvements have the vendors done?
     
    Esh likes this.
  3. sumterrence

    sumterrence Well-Known Member

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    Most of the times I ask this question I will get a respond saying refer to the advertised price lol.

    This question is helpful if you are looking at struggling towns like Broken Hill when the agent will tell you realistically how much you need to offer to buy this property.
     
  4. Leo2413

    Leo2413 Well-Known Member Premium Member

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    I always look at every contract in terms of two things: Price and Terms. (to me sometimes terms is even more important)

    So I have 1 lot of questions around price and 1 lot for terms. Quite a few times price was a deal breaker for them but surprisingly they were quite flexible on terms which can equally save you much money. Don't forget to negotiate terms.
     
  5. Big Will

    Big Will Well-Known Member

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    Depends on what the advertised price is, if it is POA makes it hard to refer to price...

    Also when I refer to price it isn't what is advertise it is what price are the vendors wanting/hoping for. Really doesn't make much difference but if the property you feel is worth 500k and the vendors are wanting 700k you are going to have some issues.
     
  6. willair

    willair Well-Known Member Premium Member

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    Brisbane..
    Maybe next time ask for a look at the contract they intend to use and see if it in the hands of the bank..