Home' API Magazine : March 2014 Contents 46
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And it’s not impossible to find them.
You’ve got to be savvy, well-researched
and willing to buy with your head, not
Slack-Smith agrees and suggests
getting acquainted with reputable
sources of data and analysis. The
Australian Bureau of Statistics has
a wealth of information on an area’s
median income, age, household type,
ownership breakdown and level of
education, just to name a few.
It also plots changes to these and
other demographic items of interest.
These are worth watching closely – as
demographer Bernard Salt points out, a
rising median income means people in
that area will have a higher capacity to
pay bigger mortgages.
Changes in demand in the future are
a big thing to keep in mind, but so is
any increase to supply. If there’s a lot of
residential development in the pipeline,
that could see prices grow more slowly –
or even stagnate.
What about the suburb’s proximity
to sought-after facilities such as retail
precincts, restaurants and cafés, schools,
parks and other recreational areas?
These sorts of features help to lift the
desirability of a suburb.
Check for any big infrastructure
projects of note or initiatives by
governments to improve an area, either
superficially or fundamentally. A new
transport route, for example, will improve
accessibility and amenity.
Looking at recent and historical sales
trends can also give you an idea of how
the local property market performs. Flick
to the Market Watch section of API to
see median price information for every
suburb in Australia.
Once you’ve found an area and
have begun searching for individual
properties, there are many factors to
consider. Rather than focusing just on
the property, also check the street and
Don’t worry too much about emotional
drivers like the cosmetic appearance
of a property. Instead look for what’s
not immediately obvious. Are the
bedrooms pokier than what you’ll find
in comparable properties? Is the yard
smaller? Does it tick most of your boxes?
For the buying process itself, it can be
a bit overwhelming the first – and even
second or third – time around. Enlist
the help of reputable, independent and
properly qualified experts to help you out.
This includes a property conveyancer to
handle your legal obligations as a buyer.
By the time you start inspecting
potential properties, you should already
have a good idea of both your investment
goals and the sort of property that fits
them. That’ll help demystify the search
process. See the property inspection
If you’re buying via private treaty, the
purchase contract will carefully spell
out your rights and responsibilities. It’s
worth having this document checked
over by a legal specialist before you sign
it, so you know your position.
There will generally be terms attached
to the contract, such as that the sale
being subject to you successfully
obtaining finance and having a thorough
building and pest inspection done.
Any terms of the contract are
negotiated between you and the seller
via the real estate agent. Once again,
seek the advice of your solicitor for any
special items that should be included.
There’s a lot to consider before you sign
the purchase contract, including:
> Don’t buy based on emotion. Buy with
your head instead.
> Don’t overcommit yourself.
> Do your homework very carefully.
> Seek the advice of experts if you’re in
doubt or need a hand.
> Stick to a carefully organised budget.
> If you’re not comfortable negotiating,
get someone else to help you – a
parent or a licensed and reputable
buyers’ agent, for example.
When it comes to buying at auction,
the process can be a little trickier. For
one, auction contracts aren’t subject to
CHECKLIST FOR INSPECTIONS
Does the area stack up from a medium to long-term investment perspective?
Does it look to be in a reasonable structural condition?
Note: It’s worth getting a professional to check this regardless.
Does it have the number of bedrooms and bathrooms I want?
Is it of an adequate size for my needs or the needs of my future tenants?
Is there car parking? If not, does this matter?
Is the yard an adequate size and is it fenced?
Is there enough natural light?
Is it on a busy road or under a flight path? Are there other possible sources of noise that aren’t
obvious? Does this matter?
Is the general condition of the neighbourhood fair?
Is there air conditioning or heating? What about ceiling fans?
Is the overall condition of carpet, window furnishings and paint good?
Does the bathroom or kitchen need some attention now or in the near future?
Is there room to add value with a renovation, extension or potentially a development?
Have I researched the local zoning and are there any planning restrictions?
Does the property fit my budget?
What’s the anticipated rental return?
If it’s a unit, do I know how much is in the sinking fund and what the regular strata levies are?
Do I know how much council rates are?
Do I know how long the property has been on the market?
Do I know when it last sold and for how much?
By the time you start inspecting potential properties, you should
already have a good idea of both your investment goals and the
sort of property that fits them.
COVER STORY // CRACKING THE MARKET
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