Quite predictable, right? But the truth is that price can be indicative of a good deal but not necessarily a determinant. We could all agree that it won’t be the same to invest $500,000 in an Auckland property as investing the same amount in, let’s say, the West Coast, where housing prices are naturally lower. This means it is best to start observing the area, the neighbourhood and see how the housing market behaves there to be able to compare and identify a good opportunity when it comes your way. Finding comparable data on the surrounding properties is a plus that aids the decision-making process. You could also check the Cap Rate, which is the price/earnings ratio compared to the rest of the area.
Once you find a reasonable price for your ideal market, you have to carefully analyse the house’s overall condition. It could be that the low price is actually hiding some critical faults or lack of maintenance, which can translate to a hefty expense for you to repair it. In these cases, we suggest you investigate a bit further, or even better, take a professional with you to inspect the house with their experienced eye.