In this episode, we discuss how to set buying rules for yourself.
Buying rules are a concept in property investment where you set some restrictions about the sort of properties that you will and won't buy.
Because property investment can become emotional, some investors will think 'but, I really like this house' and buy it anyway ... even if the purchase doesn't stack up from a numbers perspective.
Setting buying rules before you look at investment properties will save you time because you won't bother looking at properties that don't meet your criteria. They will also make your property portfolio more appropriate for you because you're less likely to make a bad buy.
You can set buying rules about:
- Maximum purchase price
- The amount of work needed to make the property tenantable
- Whether the property is brand new and requires a lower deposit, or an existing property
- Where the property is located, i.e. in a city near you or whether outside of the city you live in
- The gross yield or net yield you want to attract
- The projected capital growth you think the property will achieve
And many other potential buying rules.
We also mention the Property Investor Quiz. This 7 question quiz will give you a 'yes', 'no' or 'maybe' answer about whether you are in the financial position to invest in property.
