With rates low, prices falling and the lure of the first home owners grant, getting into the property market now may offer some of the best chances of making money.

The argument has always been that to create wealth in the property market you need to buy well. Once you do that you should always be ahead of the game.

But with so many variations in the performance of properties across Australia — and even within individual cities — picking the right place at the right price is not always that easy.

Stephen Martin, president of the Real Estate Institute of NSW says that property is not so much about location, location, location but more about timing, timing, timing.

"Timing is critical," Martin says. "Provided you are responsible with your borrowing then [today's environment] offers a tremendous platform to leverage and to make wealth."

Martin believes that one of the best ways to create wealth is to buy what he calls an "opportunity property". This is one where you can add value by renovating.

"The two best improvements to create wealth are landscaping and then painting," he says.v

Of course there are many other types of renovations to improve the value of a property such as adding rooms or updating bathrooms and kitchens. But it is important that you don't overcapitalise.

If you plan on doing renovations, talk to local estate agents to make sure you don't end up with the best house in the worst street — if you do it's unlikely you'll make money in the longer term.

It's also important that you do your homework properly when buying and that means getting a feel for the market.

Martin says you can become very skilled at assessing value very quickly. "Go to plenty of open houses and auctions and then it doesn't take long to become skilled."

Andrew Heaven, a financial planner with Wealth Partners says to buy well you need to follow certain negotiation strategies including:

• Ask lots of questions as there is always a reason why people are selling. This knowledge will give you a valuable edge when negotiating the price.
• Don't put your best offer first. You can always raise your offer.
• Take out the emotion. Decide your bottom-line price and if it's not accepted walk away as there will always be other properties.

Buying for investment
TV presenter and property expert Chris Gray says people can become very lazy when buying an investment property.

"When buying their own property people might see 50 to 100 places but when they are investing they often can't be bothered as they have other things to do on a Saturday morning so they just buy the next property they see," Gray says. "But you shouldn't be making quick decisions when buying investment properties."

Gray recommends you get an independent valuation on any property you are considering, particularly if you are buying at auction. This is because an outlay of $400 to $600 on a valuation will seem insignificant compared with the $50,000 you might be out of pocket if you buy a property at auction and then your bank won't accept the valuation.

He believes that this situation is often brought about because investors make purchases based on what they can afford rather than on what the property is really worth. And this can be exacerbated because potential investors seek advice from the wrong people. "Real estate agents may not be the best people to ask as they are in the business of buying and selling and probably not investing in properties themselves," Gray says.

At the end of the day it all comes back to doing your homework. That means recognising the value of what you are buying. If you invest in a house on the outskirts of the city because it offers a bargain basement price, chances are it will remain a bargain basement price even when the market recovers. And then it's no longer a bargain!

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