Real Estate

Property Reports: The Importance of Being Prepared

A home is an investment. As with any investment, it is important to research in depth the asset you’re investing in to make sure it’s what you really want and that it’s worth it, long-term. Whether buying cars, home electronics or appliances, savvy consumers will try to get all the information they can about their prospective purchase. Shouldn’t buyers do the same when looking at a home, which is likely the biggest purchase in their lives?

Pre-Purchase Property Reports: Vital Information for Home Buyers

When you are in the market to purchase a home, it is crucial to obtain a pre-purchase property report to get all the information you need about the home you’re thinking about buying. There are actually two different types of property reports, and getting both will ensure that you have all the data you need to determine the best approach to this purchase.

House Prices - Supply and Demand

There are some major factors that affect the supply of private property—the current supply and demand for real estates, the cost of construction and infrastructure, the anticipated future demand, the availability of land and financing, and conditions in the economy. Developers are also aware that it takes a minimum of a year to complete a project and schedule their work accordingly.

Those who build apartments assume a greater risk, because it may take several years to turn a vacant lot into an apartment complex.

If you are familiar with the factors that affect the price of residential property, you will have an advantage over the typical investor and can proceed to benefit from that knowledge. Also, note that the same force applies in the housing market that influences virtually all of our purchases—the law of supply and demand.

An example to consider
To clarify, think of two kinds of property, such as a small apartment in the Central Business District (CBD) and a house by the sea.

Returns come from capital growth and from rental income.

If you are looking for a safe place to put your money in order to achieve capital growth, then there is still no better place than to purchase a rental property. Many people have shied away from Australian property in the last few years because they have been worried about the global recession and the falling property values. However, from a long term perspective, there is no more stable asset class than to own real, physical properties. Historically, Australian property values have increased by about 9% per year.