In today’s tough property market, buyers know that their dream property will likely be out of reach and that they’ll instead have to compromise on some things. However, this shouldn’t be at the detriment of our goals, finances or quality of life, so how can we know what we should never compromise on?
What’s one thing you can almost never change about a property? Its location of course! Cofounder of First Home Buddy Buyer Daniel Baxter says:
“First-time home buyers often neglect to consider the impact that location will have on their quality of living. They're usually willing to buy further away from work, friends, family and where they typically socialise if it means being able to afford something brand new. It's not until the excitement of owning a new home wears off (like it does with anything new) and they start to resent the extra travel they're doing to work and weekend outings. Either regretting their decision on where they bought or slowly choosing to do less and less of what they used to love.”
For many people, it might be worth buying a smaller or older home if it is close to where they work and socialise.
Number of rooms
Often people will be dazzled by a brand new property even if it doesn’t meet their future needs, just because it will require less maintenance. Principal Buyer Advocate Bradley Willmott from Pursuit Property tells us:
“In my 20+ year valuations & buyer advocacy career the most common question I am asked by first home buyers is “what drives a home’s value?” I always reply that it’s the number of bedrooms and bathrooms. From a valuer’s perspective, when looking at comparable sales, we compare like with like and we note the value increase for homes in the same suburb, based on how many bedrooms and bathrooms they have. Best to go for a 4 bedroom home with the dated kitchen (that you can update later) than the 3 bedroom with the new kitchen, that you may or may not like the style of.”
Many first-time buyers can get lured into exceeding their initial budget, getting excited by the gorgeous properties on the market and suffering from a major case of FOMO (fear of missing out).
To be on the safe side, exaggerate your estimated loan repayments and have an emergency fund in case unexpected expenses come up. No matter how perfect the home is, if you compromise on your budget you run the risk of landing in serious financial trouble. Sleep easier at night by sticking to your budget!
Call in the professionals
Of course, there’s only so much we can assess for ourselves. Property Mentor Goro Gupta from 10 Properties in 10 Years suggests getting an independent property inspection report:
"With a large amount of building contractors working on any single property, it's quite natural to have defects – regardless of the builder. On average there are approximately 50 minor defects on every single new property built today. You should never compromise on the building. This is the difference between a real estate salesperson and a mentor – the mentor knows where things can go sideways and help you avoid the future pain!”
Visit the 10 Properties in 10 Years Facebook page for more of Goro’s insights.
Some things that you can compromise on include fixer-uppers (if you have the budget and skills for a makeover), parking (if there are on-street options), space (within reason) and your aesthetic preferences.