Investing Rules for Property
Many investors have a set of rules which helps them focus effort when searching for property to buy. The rules will immediately create a shortlist of properties to investigate, by eliminating all those that do not meet the criteria.
Some of the common criteria include:
- Location (certain suburbs or areas)
- Property features (e.g. must have a garage, not leasehold, number of bedrooms, etc)
- Proximity to transport, schools, or other amenities
- Strategies to use or not
- Cashflow requirements
- Minimum % of value the property must be purchased for (e.g. 20% under value)
- Minimum yield
- Commercial versus residential
Buying rules are a personal decision and there is no one set that will fit everyone. Some investors will care nothing about location or type of property, providing they can achieve a certain return. Others will prefer to buy property in a location they are comfortable with and may accept a lower return because of this. Some of the investing rules are related to the investors risk tolerance.
