Relocation Relocation Australia hosts, Veronica and Bryce, have these tips.
Peter and Maree were incredibly excited but unfamiliar with the auction process for their investment property in Melbourne.
Here are some useful strategies to help you negotiate at auction:
1 Auctions are a bit like street theatre and if you want to play a main part you need to go to the auction fully with a strategy and in control of your emotions.
2 The theatrics of an auction allow you to use all sorts of tactics in your bidding to control the pace and unnerve your competitors.
3 It can actually be a good outcome to have the property passed in giving you the chance to negotiate as the highest bidder, with a despondent vendor.
4 At the auction - watch the Body language of other bidders and notice if they’re looking nervous or discussing their bids with family.
5 Make Quick bids and never the let anyone else feel that they are in front.
6 Make Strategic bids at the right time with the right increments for you.
7 Get someone else to bid for you if you cannot stomach the pace and stress.
8 Have a Game plan and stick to it.
9 Only make a pre-auction offer if you think you could miss out or pay more by going to auction.
10 And only make it if you have a competitive advantage, which means that you are ready to buy and make a strong worthwhile offer.
11 If you win the bidding war, you are legally obliged to settle, so do your homework, organise your finance, inspections and negotiate terms before the big day.
The key to being successful at auction (other than simply having more money) is experience and the flexibility to change tack according to what is happening during the auction.
But remember there are so many variables to take into account and one strategy will never work the same way twice.
Future trends in property investment – what’s hot?
Peter and Maree were initially set on purchasing a two bedroom investment property as they believed it offered a better rental return,
But they ended up winning at auction a very suitable one bedroom apartment. Here are some tips on future trends in property investing and why one bedders can make a lot of sense .
1 Apartments can make great investments but many beginning investors consider them to be inferior investments and only for those people who couldn’t afford a house or townhouse. Interestingly, if you look at their growth over the last 10 years in all major cities across Australia, apartments have very similar capital growth rates to houses.
2 Look for one bedroom apartments in big cities, close to infrastructure, unis, transport and cafes
3 Don’t be scared off by Body Corporate fees either – they are simply reasonable costs that you would expect if you were buying a house – building insurance, repairs and maintenance to common property and also a sinking fund for “future” maintenance. How many “house” investors do you know putting money aside specifically for future maintenance?
4 Large apartment complexes often have very high body corporate fees relating to pools, gyms and lifts so it’s good to investigate smaller boutique blocks.
The biggest growing demographic in Australia is single people living on their own.
Be open to 1 bedroom apartments – they are buying into a trend of smaller household sizes and popular with Generation Y, who will be a major demographic in the workforce by 2020.