How long should you reasonably look for a property?

February 1, 2018 5.02 pm by. Lyndell

So, how long should you look for a property?

It’s all about adopting a Goldilocks approach according to Cate Bakos, founder of Cate Bakos Property.

“If you spend too much time researching, you’ll miss out. Too short and you won’t learn enough to make a sound decision,” Bakos says.

What this means is that your research should cover off the basics in detail, but nothing more.

The basics include:

  • Preferred budget range (the amount you can afford as determined by your broker/banker)
  • Suitable target areas
  • Best dwelling types for your criteria and budget
  • Land content required (must be within budget)
  • Proximity to public transport and other desirable amenities

Like Sheppard, Bakos doesn’t think you need to inspect 100 properties before you buy.

“Getting enough exposure to the latest sale properties and their results is crucial. Once you’ve seen some sale prices after inspecting a number of properties, you will start to determine values within your target dwelling types in your desired suburb.”

Bakos points out that taking a cross-section of property sales is important, not just relying on one spectacular bargain.

“Understanding the likely selling price, the type of buyers for that segment of the market, the areas which exhibit more fluctuation and the streets which attract the highest numbers of competing buyers is valuable. Once this intel is established, I’d consider THIS the sweet spot,” she says.

Doing this research phase thoroughly should only take weeks, not months according to Bakos.

“A buyer will know when a property is purchase-worthy. We say ‘three weeks to three months’ is normal. More than six months is not normal and hints that there are issues with either the strategy, the searching or the decision-making. The reality is, a researcher who over-analyses every result will always find a reason to cool their enthusiasm on a particular property or procrastinate making a decision. You need to remember that no property ever scores 100%. No property is perfect and all have their imperfections.”

Sheppard agrees and adds that you’d get all the market intel you need within 2-3 months.
“Professionals can get all their research done within a week. But I think even a month of research might be a bit too quick for a novice property investor. On the other side of the coin, if you’re not making offers within three months, you’ve probably got analysis paralysis or you’re using the wrong tools or have come across some conflicting advice or data,” says Sheppard.