People generally have misconceptions about buying an investment property. First, that all you need is money. Second, that it’s easy. Third, that it doesn’t matter what kind of property you buy.

Wrong, wrong and wrong. While we’ve helped hundreds of Australians increase their wealth and happiness by finding them quality investment properties, the process isn’t easy – and doing it on your own is plain difficult.

Knowing what type of property to buy and conducting due diligence before the purchase is just one of the make-or-break factors when buying an investment property. But with help from a specialist property investment team like Patrick Leo, the process becomes a whole lot clearer, and you’ll be able to secure a wealth- and happiness-increasing property that aligns with your financial goals.

Here, we outline some key steps for ensuring due diligence before you buy an investment property:

Market research

One of the biggest mistakes we see first-time investment property buyers make is failing to conduct market research in the area they’re looking at. Buying a successful investment property greatly depends on the statistics of the suburb, including the median yield, vacancy rate and average household income. Failing to buy in a suburb that ticks all of these boxes means you’re probably choosing a poor investment.

Building structure

Due diligence is also about checking the structure of a building, assessing whether it’s safe, is in good structural condition, and doesn’t have any costly problems which are hidden to the average human eye. That’s why every property investor should conduct a building inspection before purchase, hiring a professional to thoroughly check the premises. Patrick Leo have a network of many excellent building inspectors and can put you in touch with them.

Council rules and zoning

Let’s say your plan is to knock down the existing home on a block of land and build four townhouses on it. You absolutely have to check with the council to see if this is permitted before you purchase an investment property. If zoning laws don’t approve of this, then your plan won’t be feasible.

Utilities and services

It may seem obvious, but this one can often take buyers by surprise. Some suburbs, especially ones on the outskirts of cities, aren’t connected to basic government services like water supply, and instead use their own methods of water supply (for example, a local bore shared by residents). This can drastically reduce the property’s appeal and value.

Legal diligence

One of the biggest rules of buying an investment property is that you don’t finalise the deal without having a conveyancer look over all transfer documents. If they spot something out-of-the-ordinary, they’ll notify you about it, allowing you to take the matter to a solicitor or to simply avoid purchasing the property.

At Patrick Leo, we’ve spent over 20 years increasing the wealth and happiness of our clients by finding them high quality investment properties and helping them build a portfolio. If you’re interested in starting your real estate portfolio, get in touch with the experts at Patrick Leo today.