How we select a property for purchase
7 min read
There are a few non-negotiables that you should take into consideration when you select a property for purchase. Your individual preferences may be different to someone else, but each of these is applicable in every purchase you make.
Location is everything. It’s the one thing you can’t change when you select a property to purchase. You can buy the house next door and increase your land size; you can renovate to mitigate darkness or add in a skylight and extra windows if there isn’t enough light. You can renovate or knock the whole house down subject to council approval, but the location of the land will never change.
Some streets are better than others and some sides of the street may be better. There are certain blocks are better than others and there’s some places we would just never buy in. It might come down to planning laws in the area, amenities, how many new houses, block sizes and so on.
As Mark Twain said, “Buy land, they’re not making it anymore”. We’ll add to this and say, “Buy land in the right place, because they’re not making it anymore and you can’t pick it up and move it somewhere else.”
A lot of people ask the question are main roads really that bad? It depends on the road and on the person buying. There are definitely some main roads that we would still buy on but it comes down setbacks, street width and orientation.
One young family might want to avoid a main road at all costs or yet another might love the proximity to shops, parks and schools or childcare.
What’s around you?
Are the houses next door ripe for renovation? Is there the ability to build commercial nearby? Are there apartment buildings surrounding you? These are all things that can affect the long-term value of your property and what you might be able to do. It can work in the reverse too… some people have grand ideas of what they can do with a property, but they haven’t looked into planning laws to see if it’s possible. For instance, they might want to build up, put in a swimming pool or similar and it’s not until it’s too late they discover they can’t do that in their council area.
Does the house suit your needs, or can it be made to do so?
When you select a property for purchase, it’s important to know that some houses/apartments are harder to renovate than others. The actual structure can be really limiting due to the materials used in the frame. The slope of the block and even trees on the land. If it’s a fixer upper, then you need to be planning for that eventuality from before you make the purchase and discuss ahead of time with council what those plans are. These things all cost money. This could be money you’re putting towards purchasing well rather than spending on renovating something that may not end up where you want it to be. Which leads us to the question..
Turnkey, renovate or build?
This really depends on each person’s situation financially, and their abilities. Too many people bite off more than they can chew. Unless you really know what you’re doing it can cost you a lot more than you realise. Just because you watched The Block, it doesn’t mean that you know how to renovate and style a home. So many people say to me they’ll paint themselves because it’s easy then inevitably it takes them twice as long, costs them a fortune because they waste paint, they almost end up divorced and I usually have to call my painter to fix it because there’s more drip marks and paint bleed than on a Jackson Pollock painting.
Sometimes you might spend more on the property upfront, but save yourself a lot in the long term, by buying a house that someone has already successfully renovated.
This is a bit of a no-brainer, but it must be said, you need to make sure you’re looking at property that’s within your budget. At this stage chatting with a mortgage broker is really important, they will assess your borrowing capacity and advise how much you can afford to borrow from the bank.
Then when you come to making an offer and negotiating on the property, don’t think that going in low is necessarily going to get you a good price. Make sure you do your research on the area. Realistically what should the property be worth based on similar properties. Think about when you’re selling, if someone comes in with an unrealistically low offer you don’t respect them and you’re not willing to negotiate with them. The same applies with property, make an offer that’s on the lower side of realistic and then get the deal done with some savvy negotiation from there.
Get the right advice
There’s so much to consider when buying a property and we believe in treating every purchase as an investment, because that’s what it is. Either an investment in your future or your family.
Getting the right advice is really important, which is why we offer Financial Planning, Buyer’s Advocacy, Legal and Lending support for our clients. Get in touch and make sure you are making the right offer on the right property with the right support.