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Buying a home or investment property is likely to be the biggest investment most people will make in a lifetime and simple mistakes can be costly.
It’s important to remember that every micro-market has its quirks and buyers need to be able to recognize them. Unless you buy the property well in the first instance, no matter what the potential capital growth, you won’t gain the benefits if you have paid more for the property than it’s worth. In any market, the time you position your investment property to achieve capital growth is at the time of purchase. If you understand the primary elements of a good property and combine this with local knowledge, you should be well on the path to a successful real estate investment.
As a general guide, REBAA (Real Estate Buyers Agents Association) recommends you look for the following features when considering whether a property is likely to be an above average performer in the capital growth stakes.
1.Make sure you are buying for the right price
Do your research, and then a bit more. This is particularly important for strata properties where an area of common property (e.g. a courtyard) may used by more than one unit holder and can impact on usage and liveability of property. If you do not engage a buyer’s agent to act on your behalf, it is up to you to communicate as much as possible to ensure that everything you expect is there – and nothing you don’t, and that you have the skills and knowledge to appraise the property, peruse contracts, and negotiate the best price and conditions. Emotion and lack of knowledge costs money, so don’t take these with you to the negotiation table.
An architectural style that is compatible with the area. For example, a Victorian terrace in Paddington (NSW) is something that the majority of buyers in that area are looking for. So a 1980s cottage in the same area, no matter how nicely presented, is likely to be less appealing for the majority of buyers.
Try to avoid main roads. Tree-lined is the ideal, within an easy walk to amenities and public transport. In every suburb there are specific streets and/or apartment complexes that carry a certain cache – and buyers are often prepared to pay a premium for these addresses.
The ideal aspect is a garden and living areas facing north or north-east. If buying a semi-detached house, look for the one where the windows are on the northern side. Good natural light is what is most sought after.
5.A balanced floor plan
The floor plan needs to make sense, with good flow and balance. An unbalanced house would be one with 4 bedrooms and a tiny living area or limited outdoor space. An example of poor flow is where you have to walk through the laundry to get to the courtyard, or where the bathroom comes straight off the dining room. The exception to this rule is if the floorplan can be simply rearranged without significant structural work (unless you’re buying to renovate/rebuild).
Parking is usually preferable, however there are many inner city areas where there simply isn’t the availability. So in the absence of off-street parking, ensure it is easy to obtain a space on the street.
Aussies love to live alfresco, so usable outdoor space is always a big plus for resale value. Keep sun/wind/rain protection in mind and privacy is important too.
Good property doesn’t always have a view, however the best properties do have some sort of outlook. This can be as simple as ensuring each window looks out onto garden or a green spect. If you can’t obscure an ugly outlook or rectify a privacy issue, consider other property.
Presentation of properties for sale can be misleading. It is easy to fall in love with the appearance and trimmings of a styled property and fail to see the nuts and bolts of what is actually for sale. Conversely, it is just as easy to overlook a fundamentally good property simply because it hasn’t been tarted up for sale. In fact, you might be able to add immediate value simply by addressing the presentation. Great examples are those with dated colour schemes and furnishings.
10.Condition of the property
The condition of the property can set it apart. A well maintained property will need less money spent on it than one that has been neglected. And any savings you make in upkeep go straight to your bottom line come sale time.
#11 Talk to a friendly real estate agent like me – who can help you buy the right property. Ask me for a report on the property, the street, ask me to walk through the property with you, ask me to help with your property negotiation.
All the best with your property purchases