what to ask when inspecting properties

Be aware that the real estate agent doesn’t work for you, so their answers to any questions will be skewed to elicit a sale.

You need to be a master of you own destiny here, and do research on what type of ‘investment property’ you are looking for. The Gold Coast is full of smooth operators trying to sell shoddy apartments/houses to the uneducated and gulible – so make sure you don’t fall into this category.

It actually sounds to me like the real question for you to be asking isn’t “what should I ask agents” but “what is a good investment property”.

Seeing you’re looking on behalf of your parents, maybe you should ask them what they are looking for exactly. Is cash flow a priority or is it more about capital growth? Are they wanting a property that is already leased to a tenant? Do they want something that is slightly run down that they can add-value to? Are they interested in residential property, commercial property, or holiday letting?

The real issue when purchasing an investment property isn’t the cost, size or age of the property – it is how much of a return you will get on your money. Property is a long term investment, with a hefty upfront expense, so you want to make the right decsion for today and the future.

You can ask a real estate agent how much rent s/he thinks you will be able to get for a property, but they will give you an optomistic response. They may also fluff around with the vacancy rate in the area (and you may find yourself purchasing a property that sits empty half the year). They will quite possibly say vague things like ‘this is a popular area with professionals’ that will have no real grounding.

It is therefor up to you to know what you are looking for before going to an agent, so that you can spot the fictions from the facts.

A good place to start is to read a book or two (or ten) on property investing in Australia so you get some idea of various property investing strategies. The magazine Property Investor makes for a good ongoing read. Check out http://www.businessmall.com.au if you want to subscribe (they also sell a heap of property books online – but check your library first).

The guy who runs this site, Steve McKnight, has written a couple of worthy books on the topic – but there are a mulititude of books by various authors that all follow their own strategies. It’s a good idea to read more than one author so that you can pick the strategy that feels best for you and your situation. Also be mindful of any books that are older than a couple of years, as the market has had a dramatic slow down recently so different tactics are required than when working in a hot market.