The 1 thing you should never trade off!

4 Apr

Never trade off something you cannot change about a property

Property buying is all about trade-offs. Whether you spend $500,000 or $5 million - no one ever gets everything they want within the comfort level of their budget.

Lots of you might think that if only I had another $100,000, I would be able to get the perfect property. In reality, if you had another $100,000, you would have higher expectations.

The most common trade-offs buyers make are:

Budget - going above a comfort level and taking on more financial debt than they would like
Location - buying in a suburb that they don't love or further from a train/bus station than they would like
Specifications - choosing to forego an extra bathroom or parking
Condition of property - buying a home that needs a little bit of TLC

Three of these trade-offs have something in common - you can change them over time.

Budget - You may be able to increase your household income, or decrease your expenditure to find financial comfort
Specifications - Houses can be renovated to add bedrooms, bathrooms, and sometimes even parking. Apartments can often add a bathroom or study, or look to buy a parking space from a neighbour
Condition - Every property can be cosmetically improved and uplifted to be modern

The one thing you can never change - LOCATION!

The area around the location may change over time - transport may become easier and/or the area may gentrify towards a lifestyle you desire - but these things are completely outside of your control.

If you are honest with yourself upfront about what you can afford, then my advice is to be clear on three things:

What are the top three suburbs that you would love to buy in?
Having less than three is very limiting, and may mean you are searching for a needle in a haystack.
Having more than three can lead to decision paralysis and you may be unclear about how property value shifts between the suburbs.
What other suburbs are you open to?
This is being realistic that you may not be able to afford what you want in your dream suburb, but you should aim to have a few suburbs that you are open to exploring if the right property comes up within budget.
What suburbs would you never want to buy in?
Everyone needs a geographical border to the search and being clear on what that perimeter is upfront will save you countless Saturdays looking at properties that you would never buy.

I heard of an owner-occupied buyer recently with a search focused on "we are looking at apartments in Mosman and houses in Bexley". Presumably, because a 2-bedroom apartment around Mosman costs about the same as a 2-bedroom house in Bexley.

It is perplexing to consider two locations that are so incredibly different in terms of lifestyle and location. If you want to buy in Mosman, you are never going to buy in Bexley! And vice versa.

The other one that comes up often is Sydney people looking at properties in Newcastle - thinking that they are trading off a Sydney apartment for a beachfront home in Newcastle. It takes them about two months to realise that even if they go to Newcastle, they won't be getting everything they want within their budget - so what's the point in moving?

You can never change the location of a home so think long and hard about where it is you want to live and go from there.