Purchasing a home is a huge investment, there’s no other asset that can help you build wealth more consistently than real estate. The right property will increase in value over time, allowing you to get high returns in the future.
Finding the “right” property may seem like a given, but it can be quite easy for buyers to purchase the wrong property if they’re going through the buying process by themselves.
Understanding the factors that go into choosing the right property and having a real estate professional on your side can go a long way in helping you through this process.
The importance of buying the right property
The right property is about having an owner-occupier appeal; it makes you think, “I want to live here” and it gives you a clear sense of ownership. Buying the right property is about ensuring that the property serves you while you own and use it.
The right property should perform well and build equity, giving you more growth opportunities. When you purchase the right eal estate it grows faster than inflation and the growth in the total value of your property should outstrip your ability to save.
A high-equity property will allow you to move from one life cycle to the next smoothly when you decide to sell the property and move to the next property. Your property should be able to serve you in any market once you’re ready to sell.
Negative impacts of buying the wrong property
The buying process can be frustrating and exhausting at times, especially when it seems like the right property isn’t available. This can lead buyers to settle for properties available in the market even though it’s not the right fit for them.
As an example, we recently had a conversation with a client who wanted to bid on a property that our team at Select Property Advocates would not recommend. She was getting a little frustrated by the process, but our advocates identified several flaws in the property the client presented to us, such as an undersized living room, a south-facing living area and courtyard and a lack of windows and natural light in the kitchen.
Our advocates were able to help the buyer understand that it’s important to be patient and objective during this process. If the client sold this property in a market with numerous options, buyers won’t consider it and they will be stuck with a home that is hard to sell, forcing her to reduce the price just to get a buyer.
Buying the wrong property can result in a lot of long-term negative impacts on your physical and mental health. The wrong location can cause extended travel time and a lack of access to public transport. Even the orientation of the property can dramatically impact the home environment. With the wrong property, you won’t get as much enjoyment from the property as you expected.
With the wrong type of property, you can have a problem with water ingress due to inferior build quality that is prevalent in newer non-established properties, having to sell earlier than planned due to the property not being suitable.
Property growth is not linear so holding it for the right amount of time is a key factor in growth and equity. If you’re forced to turn over a property because it doesn’t suit your needs, this can result in capital loss. Not every property achieves growth. There are many properties that do not gain value and some that even lose value, which is why the quality of the asset is so important.
Factors to consider when finding the right property
Key factors that can help you identify the right property include:
- Affordability – This is one of the most fundamental questions you must ask yourself: Can you afford it? You need to assess how much you can pay in a transaction and monthly repayments. This will help you narrow the scope of your search.
- Motivation for buying – Understanding the reasons you want a specific type of property will help you identify the non-negotiable features you must have in your home and which ones you’re willing to compromise on.
- Location – It’s important to find a property in a prime location that aligns with your needs (e.g. access to schools, parks and public transportation). This will also increase the total value of your property when you’re ready to sell it.
- Job stability – It may not be a concern now, but job stability within the area of a potential property is important to consider for your long-term future.
- Rarity and scarcity factor – Is the property you are buying replicated over and over or is it a rare offering that does not present to the market often? If you can find a large number of similar properties on the market at the same time you are probably looking at the wrong property.
The property market moves in cycles, and it’s easy to be influenced by these trends and lead you astray. Even mixed messages from the media can confuse you and cause further anxiety. Partnering with a trustworthy buyer’s advocate can help you stay on course and stand firm on your budget as well as your wants and needs when it comes to finding the right property.
How a buyer’s advocate can help you find the right property
An experienced buyer’s advocate, such as Select Property Advocates, can provide buyers with a consultation before the buying process so that buyers can talk about their brief and what they’re looking for in a property. Establishing non-negotiables for a property can also narrow down the list and make the search more focused.
Searching for a property with an advocate can evolve, as great advocates can show buyers potential options they have not yet considered that will still meet their needs yet something they have not thought outside the box for while still fitting their requirements. We do a complimentary consultation to talk to clients about where they’ve been and what their journey has been like so far, discussing different options they’ve been looking at.