Originally posted by NLion at 12-10-2010 23:22
What would be the first things that you would do in terms of 'homework' in to knowing how to get the best deal and such..
Here's a rational approach, making an 'investment' as distinct from a 'purchase':
1. Figure out a small market niche that you're comfortable with.
this is something you know, and can afford. A good example may be places appealing to expats: if you are an expat you probably have an edge there competing with locals, whereas you'll be easy meat if you try to enter a 'local' market. I know someone who specialises in top-floor penthouses on HK Island ... a good example of an ultra-small niche ... she makes a killing because she knows it well.
2. Forget all other opportunities, focus on your niche.
this requires self-discipline. But you will kill yourself if you try to get to know the entire market, or respond to opportunities that you don't fully understand. Property is not one market, and it doesn't all move together. You can find niches nestling side-by-side, doing their own thing largely independent of the rest of the property market. You have to be king of the hill in the target market you want to work in.
3. Do the homework: go visit a lot of places.
sorry, there is no short-cut. You have to know the market yourself. Ultimately you're playing with your own money, and if you rely on other people to advise you or make recommendations, you will end up transferring all the economic benefit of the deal into their pocket. If you're serious about making money in property you have to really love looking at places and then deciding not to buy.
4. Make some lowball offers, and let them go.
only way to know a good deal is to know exactly where that point is that the seller will walk away. And the only way to know exactly where the market is today is to be outbid - by the smallest margin - and allow someone else to buy a good deal you would have truly wanted.
5. The rest is easy: when you see a good deal, you will know it's a good deal because you've seen the other deals, and you can go for the jugular.
and, even better, you will be able to act as if it's a bad deal (even while you sign the contract), knowing all along what your next best fallback deal is. Only way to get a good deal is to be able to walk away.
6. While doing all of that, build relationships with banks, find a good solicitor who understands the pitfalls of your niche (especially important in NT), and keep your cash ready.
the best deals come on the market unexpectedly and then move fast, so you have to be ready. It's always the fast mover that gets the best deals.
Or, if all that seems like hard work, try the intuitive approach:
Read what's written in the newspapers, listen to the news, and take the advice of a nice friendly estate-agent. But if you like that approach you might just as well go to Macau instead, you'll probably have more fun and at least have an outside chance of making some money back.