Select Gets Personal: What are Three Things We Look for When Purchasing Property?
Buying property is generally a long-term investment – and something that shouldn’t be purchased on impulse. Whether you’re buying for investment or dwelling purposes, there’s a checklist of things to consider before stepping onto the property ladder.
This week, we asked ourselves three things we would personally look for when considering the purchase of a property. The results?
Sharon: ‘Location, price range and the size of the home.’
Kimba: ‘Location, backyard, a good bathroom.’
Peter: ‘Location. Price. The surrounding facilities – like amenities and schools.’
Corey: ‘Size, location and price.’
Rachelle: ‘Location, land size, and future developments in the area.’
Trefor: ‘Location, house design and access to amenities and recreational spaces.’
A closer look
It’s not surprising that all of us included location in our answers. Investopedia identified four factors of a ‘good’ location; centrality, neighbourhood, development and lot location. The importance of location permeates all aspects of the buying decision, despite the fact a “good” location might mean different things to different people.
Factors such as; where your house is positioned in regards to the CBD, surrounding suburbs, demographics, future planning and surrounding environments are all related to how one might judge a property to be in a desirable location. The house itself is a depreciating asset, and an example of how location value can offset that loss.
Buyers who purchase property after considering these factors will find that at the end of a boom, their property will depreciate at a much lower rate if they buy well. To read more about the importance of location, visit our previous blog post here.
The price of the property was another popular answer. Property Observer identified the ‘money buyer’ - a type of person who looks at buying something perceived as cheap, but who focuses on its future financial growth and outcome. In a buyer’s market, the price of a property can go one of two ways – it can start a bidding war because of a perceived good deal, or it can scare away potential buyers.
But how do you know you’re getting property for the “right” price? Usually, on doing a bit of research into the value of the surrounding homes and how much their selling for in the current market, combined with any future developments that may be occurring in the area, you may find an indication as to whether you’re purchasing something promising for the right price, the sellers are overreaching or if they’re desperate to get rid of the property.
The size of the property was the third most popular answer. According to Smart Property Investment, land size is the most obvious factor for investors when they purchase property: ‘it is the land that grows in value, not the building on top of it.’ The subdivision of a larger piece of land is one strategy used to boost equity – and with the idea that investors can make more money from multiple dwellings on a single block, it’s a popular decision if the local council put zoning changes into place.
Other things to consider
While these were the most common things we personally consider, your decision is influenced by a magnitude of other factors. These might include crime rates in the area, reasons why property is on the market, how much finance you can secure, environmental hazards, advice from a legal and mortgage professional, your future plans, etc.
In this way, a mortgage broker is one of the best people you can speak to about purchasing a property. If you’re thinking about securing finance to purchase the home of your dreams, or to start your investment portfolio, give us a call on (08) 9417 3399 to speak with one of our experienced brokers.
At Select, we make finance simple.