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In this week’s episode, Dave, Cate and Pete take you through:
- Listener Question: “A glass half full question … as we transition into a Buyer’s market, what steps can investors take to be positioned to take advantage of an opportunity that might present itself”
It’s a short answer – buyers should accept when the buying conditions are good and the property is A grade and be prepared to buy it. Too many lose out when they are angling for a bargain, and they either wait, wait, wait until the opportunity of timing the bottom of the market has passed, or they buy a bad bag of apples for a super low price.
Market is going down because interest rates are up and borrowing capacity is tighter, but that means that you are also in that position.
Look at where you can cut back your expenses.
Don’t be sitting on the side lines. By the time you’re ready to move it’s 6 months later, make sure that you’re ready and if you want to time towards close to the bottom of the market, make sure that you’re ready to go so you can buy the next day if that’s really what you’re aiming to do.
- What are some of the things we can check online before we even book an inspection?
Check street view to make sure it’s not near anything untoward – school or something you don’t want to live next door to.
Make sure it’s still for sale (ie. check open times and call if in doubt)
Check zoning – what affects the land, something underneath it, planning point of view. Land check, but there are free versions. You can also contact the council.
Easements – and check nothing is built over an easement
School zoning – well regarded public schools, you see people making sure that they’re buying within a zone. It’s difficult to forward plan with a school zone, boundaries can change, principals can change. You need to be careful if you’re on the boarder. Could you save money buy purchasing where you want to live and sending your child to a private school?
Overlays – what do they mean and how can you find out more?
Orientation – is it problematic?
Shape of the block – if it’s an odd shape there is wasted space that can’t be used in the yard. Where does the dwelling sit within the block – is it logical that maximises space or is it in an odd part in the block and wasted space.
Comparable sales – if they are asking too much based on what other properties sold for, then just leave it. In a few weeks time, the price has probably come down.
- What things should you be looking out for immediately when inspecting in person?
Take a video to get it captured so you can refer back later
Movement cracks (new paint that hides cracking), smells, dampness (mould and water stains), water leaks (swollen timbers, movement cracking on the floor with tiles in bathrooms), bad neighbours, power poles and transformers, powerlines, bus stops, things that stop you parking (no standing, hydrants, crossovers etc)
Trees too close to the building, worse if neighbours tree because you can’t do anything about it. If tree is too big and of a particular species, you can’t take it down
Slope – development it increases cost, but could cause problems with pooling water against a wall.
Take a walk around the block
Audible things that might bother you; (air traffic, bus, train, traffic, schools, fire stations)
Street parking – is it abundant?
Does the street get busy at any particular time? Ie. schools, parking restrictions, functions at nearby centres, clearways etc.
Anything you personally want to avoid being near (we all have our sensitivities)… it may be a church, graveyard, hostel, pub… make your list and be firm about it
How many other people are going to the inspection – people in their 20’s with mums and dads, do they look like developers or tradies who are going to flip. You may only need 15 mins, but stay there for the full 30 mins and see who comes and goes.
Stand around the agent and listen to the questions being asked. Find out a little bit about how the campaign could go, when offers could start getting fielded. Is there a chance the flood gates could open soon?
- The ways to assess a ‘workable’ floorplan vs a complete overhaul floorplan
Look at the floorplan online
If you’re looking at a property that you want to change – look at the wet areas and how they are grouped and how the house rolls out.
If you’re looking at a terrace house, you often get kitchen and bathroom down at the very end. If you’ve got a property with the right floorplan without having to get new foundations, you’ve got a far more cost effective renovation and workable floorplan.
In a great location, great street, but the floor plan is unworkable, but that’s why it fits into their floorplan. But they’re not factoring costs to re-arrange the floor plan.
If that particular discount is enabling you to get into something that they’d be precluded from getting for quite some time, then it may be worth doing provided you can live with it for a long-time. A home buyer can take the time to get into the location that they want to get into, they’re happy buying a property that may be more run down, floor plan may not be perfect, but they plan to live there for 10+ years and gradually improve the property over time and over the years. Want to get the bigger block and the bigger property even if it’s a bit more run down.
- Cosmetic work vs tradesperson work vs full planning permit
Be clear on what type of renovation that you’re going to be doing.
Cosmetic – colours
Tradies – have to have certificates of compliance or the work is beyond you.
Planning permits – moving walls or adding rooms.
Should I be seeing certificates of compliance in the contract of sale? Note this when you are looking at the property.
Be confident about what you’re taking on – are you taking on liability from someone elses work that was done immediately. Or council telling you to pull it down or insurer not insuring you because of this.
Solicitor should be on the look out, building and pest inspector should pick up some. What is the limitation for those professionals with the information that they have on hand. These are the ideas that I’ve got and the stuff I want to do.
When you inspect the property, conveyancer and solicitor haven’t seen it. Try and find the past sales photo campaigns, they may still be on the internet. Overlay the previous floor plan – didn’t have deck, no shed out the back, point these out to the solicitor.
Has it all been done above board.
- What you can find out from council about the land/dwelling
Land – encumbrances – easements underneath, covenants, restrictions – can change the use of the land.
Any neighbouring applications for renovations or developments – blocking light, 4 units sites being built
BMT quantity surveyors – register and plug in an address and you’ll get a notification if any planning permits submitted within a certain radius.
If I’m looking to buy long-term and lots of people are knocking down houses to build new ones – urban renewal, some up lift in price. Or is neighbour going to knock down their house and build dwellings. What’s happening in the area, or is it extensions.
- Checklist helps
Make sure that you haven’t missed a single step, systemised crew
Flood or fire cover – you can get a good indication from an online insurance quote, is it a low risk property or a high risk.
It’s just a hint, not thorough research – indicator. Use AAMI as an example – if it’s considerably higher than normal, there is an indication that the insurer could have a problem with the location.