Either way, the successful outcome of your decision to buy a particular property will be influenced by the amount of research you do. Of course, money will always be a major factor, but other issues can make a huge difference. In this article, we look at the various things you will need to take into account, depending on the sort of property purchase you are making. Whether you are buying a home for yourself or as an investment, the criteria will be very different. The first is essentially an emotional decision – after all, you will want to feel happy, safe and settled for as long as you live there. Buying an investment property, on the other hand, is quite the opposite – it needs to be purely intellectual, based on achieving the best return for your money and have nothing at all to do with your idea of a great place to live! Buying a house If you are buying a house to live in, then you probably plan to share it with others, so the first question you need to ask is whether you could live in this house for the next 10-15 years? Is there room for it to grow with your family, and is it in an area where you want to raise your kids? The next question to consider is the amount of money you are willing to spend. You may want to buy the biggest house you can afford but a big, beautiful home with little or no furniture can feel empty and cold. What’s more, living a life where every last cent is spent on the mortgage can quickly wear thin and is often the cause of family stress, so do not push yourself up to the limit of your budget to buy the house of your dreams. Having funds available should interest rates rise or for an emergency will also go a long way towards making the experience more enjoyable. Are recreation facilities important? If you're a keen tennis player or love to go for bush walks would you prefer to live in a property within walking distance of these facilities? Think about other sports or leisure activities you enjoy and make sure the home you are considering buying allows you to easily keep in touch with these activities. What about zoning changes? Find out if there are any changes of zoning planned for the neighbourhood you are considering buying into. A normally quiet area could be planned for industrial or commercial zoning close by. Find out what zoning changes are planned for the area and then decide if you consider these a disadvantage or advantage. Is public transport essential? Most Australian households have a car and prefer to drive than use public transport and while public transport may not be important now think about the future - do you have children who will need access to public transport as they get older? What sort of public transport systems are available in the area? How conveniently located and regular are they? Are there ample parking facilities? If you drive, it's likely that parking will be a consideration in the property you buy. Look carefully at the parking facilities. Will they be adequate for both your current and future needs? Will visitors have trouble parking at your new home? Are there parking restrictions such as clearways outside the property? Do special restrictions apply? Some local councils can place restrictions on the changes you can make to a property. These are generally known as covenants and can affect everything from the style of fence you are allowed to erect around your property to the colour of your roof. Before you buy, make sure you are aware of any covenants on the property and then decide if they are of concern or not. Buying an apartment If you are buying an apartment to live in, you will have already made certain lifestyle decisions, such as choosing to share certain facilities with others and forego the poolroom. However, before committing to buy that unit with the great views you have fallen in love with, make sure you check out the following potential problems: Sound proofing and insulation – you want to be able to live your own life without listening to the neighbours' music or conversations through paper thin walls; Privacy – if another tenant likes to sunbathe in the nude by the pool (or you do!), what action is the corporate body likely to take towards respecting other tenants’ privacy? Pets – love them or hate them, it is best to find out what the policy is, and whether the tenants actually respect the rules. It is best not to think you can buy into a no-pets building with Fido because once they meet him they will just love him and relax the rules. Hot water – what is the facility, and will it meet demand? Will you be able to do the laundry, take a shower and run the dishwasher at the same time? Parking – will your car be secure? Is there enough parking allocated to visitors? Storage – living in a small space is so much easier if you can reduce the amount of clutter, so it is important to have plenty of cupboards and other storage facilities available for hiding away those out-of-season clothes, camping equipment, kayak etc Laundry facilities – you may prefer to be able to do your laundry within the apartment, in an area that is not visible to the rest of the apartment. Natural light – how big are the windows? Is there enough light coming into the apartment during the day, to reduce energy consumption and generally make it a healthier place to live?
Location, location, location The phrase has become a cliché, but the principle is still valid, for both owner-occupiers and investors.
If you are buying a home for your family, the criteria will range from the distance from work or schools, the need to live close to relatives, through to lifestyle choices. While price may be an issue, take into account that if you do not feel comfortable in the neighbourhood or it takes hours to get to and from work each day, that cheap little cottage way out of town may not be a good choice, after all. There is always demand for housing which is close to schools, transport or water views – for good reason. So if you take these elements into account - even though you may plan to live there forever - it will be easier to resell if the need ever arises. A home within walking distance of a school – particularly the better ones, public or private, will usually bring a good price even in the slowest market. Remember that, unlike private schools which can take students from anywhere, public schools must give preference to pupils who live within a local enrolment zone, so this will also influence demand. Buying investment property While location is important in selecting an investment property, the style of the property is just as important. It may be helpful to think of it as a space to be marketed, rather than a home you could live in yourself. As such, the property needs to be attractive to the market (renters) in order for it to remain occupied and therefore earning consistent income. When you start looking for an investment property, consider buying a property which would be suitable to most of the people living in the area where the property is located. For example, buying a one-bedroom apartment in an area which is dominated by families with young children is likely to reduce the size of your potential rental market and as a result your property could remain vacant for long periods of time. Similarly, it does not make a lot of sense to buy a three-bedroom house with garden in an area which is mainly populated by single people or professionals without children, because they are unlikely to have the time (or inclination) to look after a garden. Another important element in the investment equation is the potential for capital growth. Rental income can help cover costs and expenses associated with owning rental property, but if you buy a property worth $150,000 today and it's still worth $150,000 in ten years time, you haven't actually added to your overall wealth. What tenants like Good tenants are possibly the most important part of any property investment, along with finding the right property which will bring good returns on a consistent basis. So if you are looking for an investment property that will attract and retain good tenants, take the following criteria into account, as quality will equate to a happy tenant: Proximity to work or tertiary education facilities Proximity to shopping facilities Access to transport (a short walk to the train, or on a main bus route) Room size - many tenants will be single adults, who rarely sleep in single beds. They also need some private space, so bedrooms should be large enough to accommodate at least a double bed, stereo or television, and maybe a desk or table and chair. Storage - built-in wardrobes are ideal, as is space for bookcases, dressers or drawers Parking - a definite advantage, especially with inner-city accommodation Security - deadlocks on doors, bolts on sliding doors, security intercoms in unit buildings.
While it is not easy to determine what level of capital growth a property might return, thorough investigation into transport, retail areas, public services, employment, development activity and land use generally in the neighbourhood should reveal if there is any major change earmarked which may affect the value of your property. Some general tips When buying property it's a good idea to find out what's going on in the neighbourhood. Talk to neighbours or friends who live in the area. Is there any neighbourhood issue that might diminish your quality of life or the value of your investment? Have an inspection report completed by a qualified building inspector before you make an offer on a property. Whether it exposes a major problem or just turns up a few weak spots which do not change your mind, at least you will know about anything that may need repair. If the home you are buying has undergone major renovation, it is wise to seek as much information as possible from the sellers, including a list of improvements, contractor's name and licence number and a record of when the job was completed. This may be useful if you decide to do further renovations or improvements. Buying property should not be undertaken without thorough research and assessment, so before you make a decision (whether you plan to live there or rent it out to tenants), make sure you seek appropriate advice from a professional such as a reputable, licensed real estate agent, your accountant, financial planner or other advisor. | 
