In my experience of buying properties, I believe in the following 5 most important principles:
I am cautious of the cliché “Location, location, location”. Sure, it is to emphasise the importance of location for a particular property. However, location means different things to different people and it depends on whether someone is buying the property as an investment or as an owner-occupier. Some prefer the hustle-bustle of city living and can put up with increased human traffic and noise, yet others may prefer a more leafy surrounding whilst sacrificing distance to the CBD. In general terms, I believe a strategic location should cover the following aspects as far as possible:
a) Close proximity to public transport and CBD ~ public transport adds appeal as it gives the owner or tenant an alternative to private transport.
b) Close proximity to good schools / learning institutions. For most students and families, this is a big attraction due to convenience and prestige.
c) Local attractions such as shopping malls, parks, cafes & restaurants, beaches and other significant local amenities add to the lifestyle and allure of the location.
d) Minimal traffic noise ~ it is generally better to avoid being located on major streets and highways, toll-roads, train lines and flight paths to minimise traffic noise but close enough for easy access by car and public transport. Remember, real estate agents like to use words like “whisper quiet street”, “cul-de-sac” to promote a location which is peaceful and quiet and this is a legitimate appeal to most buyers.
e) General surrounds ~ a leafy, tree-lined street and lower population density location is generally better than one which is over-crowded with apartment blocks, commercial and industrial facilities although in some cases, the latter may also have good investment outcomes in the long term.
Obviously the above may be less applicable for investments such as a holiday lodge by the ski fields, an ocean-front property or other higher end properties and apartments.
2. Floor plan
The most important aspects of floor plan should include the following:
a) Floor plan design should promote privacy for bedrooms, efficient use of floor space and modern open plan living for family living and entertaining.
b) Courtyards, patios and balconies should be of good size and configuration for outdoor living and entertaining.
c) Good storage facilities such as wardrobes, bathroom vanities, kitchen cabinets, laundry and utilities.
d) Aspect, views and outlook ~ In Australia and the southern hemisphere, one of the most favoured aspect of a property is the north and north-east aspect as it provides ample natural light. This is important as it gives the apartment its distinctive “feel”. Bright and sunny aspects, district, water and uninterrupted views are preferred. Be sure that existing views will not be built over and blocked by future development as this is a sure factor which will decrease the value of your investment.
e) One important factor which buyers often overlook is ceiling height. The minimum ceiling height required for apartments in New South Wales is 2.45m. An apartment with good ceiling height should be approximately 2.7m although ceiling heights may vary from different living areas such as balconies, kitchen and bathrooms. High ceiling and lofts give a sense of space and openness.
Note: In New South Wales, a bedroom must have at least a window to be deemed as such.
3. Finishes and inclusions
These items refer to the quality of kitchen appliances, gas cooking and heating facilities, quality shelving and cabinets, tapware and bathroom fittings, quality carpets, paintwork, door panels, handles and skirtings, glass doors, powder-coated panelling, switches, modern lighting, reverse-cycle air-conditioning, bathroom and kitchen wall and floor tiles, wall panelling.
4. Body corporate / maintenance
The effectiveness of the Body corporate of an apartment development will determine the strata levies, both the sinking fund and the administration levy that you will be liable to pay. Personal preference will dictate whether you will be willing to pay for conveniences such as swimming pool, gymnasium, spa and sauna, concierge, on-site security guards and other facilities. Building with poor management and maintenance will deteriorate more rapidly, thus limiting your investment up-side.
It is also good to know the ratio of owner-occupiers and investors in a particular apartment block. Owners tend take better care of their properties and a high level of owner-occupiers is generally better than a building which is majority occupied by tenants.
The profile of occupants is also an important factor, ie whether they are professionals, retirees, students or migrants will have an impact on the marketability and appeal of your apartment.
This is one of the most important pieces of homework that you need to do. Before you dive into the buying process, do look at as many houses and/or apartments in as many locations as possible. One of my starting point for research is to obviously look at what is on the current property market. In Australia, domain.com.au and realestate.com.au will give you a national account of properties for sale or rent.
Other useful information includes property reports, property investment magazines such as Your Investment Property which provide commentary, advice and analysis on property investment.
Another tool which I find useful is to participate in property forums and attend property seminars. Always keep an open mind about the information you have gathered as there may be no right or wrong answers for a host of issues as your investment goals and criteria may be different from other people.
Talk to friends, experts, real estate agents and people who live in the neighbourhood that you are considering and gather as much information as possible. This way, you are able to compare and contrast between the good, bad, acceptable and the down-right avoid at all cost.
Good luck and happy hunting!