At this point in time, consumers have more access to whatever we want than ever before. Maybe it’s the digital revolution that has given us a greater sense of entitlement, along with a sharper impatience for a quick hit. Maybe we just panic buy, because we get overwhelmed with the sheer volume of information available to us. It would be easy to accuse millennials of wearing rose coloured glasses when it comes to buying property, but we all know someone who is guilty of this, so they’re not alone. We’ve been to the elaborate housewarming parties after all, and grappled with why they paid what they did, for what they now own.
Impulse buying because you love a property is a bad idea, as is not doing research because you’re too lazy, or saying ‘it’ll be right’ when you really don’t know if it will. More than a third of property owners are guilty of falling in hard for a property and skipping the due diligence process with glee, giving no thought whatsoever to structural integrity, strata reports, the neighbourhood, security or pest infestations to name a few. There are also buyers who may not be buying with rose coloured glasses specifically, but will admit to not really knowing what to look for when buying a house or apartment. They will walk through, bounce on a floorboard here and there, knock on some walls and say ‘yep, seems good’. If you ask them what they’re doing they’ll have no idea and may also not even know enough to know what professional enquiries they should even make. There are also the broken buyers – the ones who have looked long and hard, missed out at a few auctions or been gazumped in the private treaty process, are tired of their in laws’ spare room, and desperately want to get back to a normal life. They make a snap decision, simply because they just give up, buying whatever solves puts a roof over their head.
Some of the key things that these buyers might overlook are also some of the most important and, worst of all, the most expensive to deal with, after ownership has been taken. From a poor-quality paint job that needs to be redone entirely to drainage problems, rising damp, dodgy construction, non-compliant fire safety systems (in apartment buildings) and the list can and does go on. Almost three quarters of owners find themselves spending more money, after they have moved in, on repairing, replacing and investigating things. Generally, if they have gotten to this point, they also find themselves reflecting on their purchase price, wondering if in fact they should have spent more time, paying a little more attention to the detail. It’s estimated that almost a quarter of buyers have some form of regret about their purchase after moving in.
The important things are to get informed, keep a cool head, be patient and leave your emotions at the door. Read and make some notes before you visit the property and think about the things to pay attention to when you go to inspect. While looking through the images online, you might wonder how old the fence is around the garden, how big certain spaces are and what happens in that weird shed next door that’s flush against your fence line. However, don’t forget that apartment buildings can also be home to neighbours at war, leaking plumbing, inadequate common property services and… the BIG one, leaking balconies. Taking time at home to look over houses in detail with your building inspector – from the front entrance, through to the rooms, attic, sub-floor areas and garden areas – gives you the chance to think about what kinds of questions you need to ask the agent on the day. Likewise, obtaining a Strata Inspection Report with unit blocks can reveal a history of crazy neighbour disputes, noise transmission problems, illegal structural renovations, leaky windows and upcoming special levies that might soon be struck. Such levies can go on for years and add tens of thousands or even six figure sums to your purchase price. By asking the right questions and making yourself informed, it also shows the agent – and therefore the property owner - you have come prepared and you are not someone to be messed with.
It’s also a good idea to see a property more than once, at different times of the day, and spend some time in the local neighbourhood if you plan to live there and not just invest in the property for rental purposes. Pop into the local supermarket for a few things, go eat at the local café and try to get a sense of who lives there, what the vibe is and whether it will be the right area for you to move to or invest in. Similarly do some research about what’s happening locally with regard to development; the local council can always help in that regard. A rose-coloured perspective will make you entirely miss the new freeway planned for right behind your house, the new high-rise that will block your views, or the flight path overhead that you didn’t ‘see’ or hear at the open house inspection.
Of course, we all get excited when we are going to buy a new property, but don’t let excitement cloud your view and put you at risk of ruining the future enjoyment of your home! Be prepared and you’ll be well placed to enjoy your new home fully, or reap the full benefits of your investment strategy, without angst or regret in the future.