Buying Tips for Houses and Apartments

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Making a property purchase is a big decision and often one of the largest financial transactions you will make in your lifetime. Therefore it pays to avoid costly mistakes!

I have compiled a list of short tips and general advice for your next property search. As mentioned in my previous blog post, houses are generally my preferred investment option in Brisbane at this time, however this is not always the case and apartments can make for good quality investments at the right time or in the right location. 

Tips for purchasing an apartment (in any location):

- AVOID large blocks - In large towers of 100+ apartments, there will always be 5-10 other apartments for sale and rent at the same time as yours so the competition is fierce and you will have no point of differentiation > not a good recipe for capital growth!

- AVOID brand new/off-the plan purchases. You are often paying a hefty developer premium and often a referral fee which is built into the purchase price. Paying over market value for an asset is the polar opposite of a good investment strategy.

- AVOID areas of oversupply (too much construction) and TARGET areas with limited supply (either through zoning restrictions, building height restrictions or character overlays or location benefits e.g. near water or a train station).

- AVOID buildings with chronic problems that cannot be fixed e.g. noise issues from a nearby railway or major road, tiny bedrooms, lack of natural light, poor access/parking arrangements or a lack of privacy. 

- AIM for small, boutique blocks with a point of difference and unique appeal to both tenants and future buyers!

- PRIORITISE location and proximity to transport and amenities as this is the most important aspect for prospective purchasers and renters.

- CHECK the body corporate fees and avoid expensive maintenance (lifts, pools etc) 

- LOOK for something with a point of difference compared with other properties on the market such as a nice view, a large balcony/courtyard or a favourable floor plan.


Tips for purchasing a house (in any location):

- AVOID brand new or off the plan purchases for the same reasons. In the case of houses, instead of a large tower you might be in a “house and land estate” with hundreds of other properties all exactly the same. This ties into the next point:

- AVOID areas of oversupply – i.e. new subdivisions on the city fringes. While the houses may be modern and well-built, there is no point of difference and too much competition for tenants and future prospective purchasers!

- AVOID properties with “problem features” such as large retaining walls, structural problems, large unapproved structures or poor layouts that are hard to change. Pools can be ok if the right approach is taken, although some buyers prefer to avoid these all together due to higher maintenance costs.

- TARGET well established suburbs with a limited supply of established housing and in close proximity to the CBD (exact distance will depend on your budget!).

- LOOK for properties with strong land values and with public transport nearby (train stations, major bus routes, ferry terminals).

- RESEARCH specific pockets with favourable features – such as quiet, secure, tree-lined streets with footpaths and not too much through-traffic.

- CONSIDER houses within strong school catchments as these will be heavily favoured by owner-occupiers who are the main drivers of capital growth.

- FOCUS on the things you CAN’T CHANGE. This includes the location, the land size, the aspect, the slope, backing onto a railway or under a flight path. If there is a problem with one or more of these features, you are stuck with them! Don’t worry so much about the things you CAN change as you can always address these down the track. This includes properties which require maintenance, cosmetic updates (paint, carpet, blinds), more major renovations (new kitchens and bathroom) or with poor (but easily altered) floor plans.
If you want to get in touch, please send me an email:
micahkg@gmail.com

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