Seven things to consider when buying your home

: Tips

by Serina Bird

You’re in the market for a place to buy, spending your lunch hours scrolling through places online and Saturdays at open homes. Everyone has an opinion, and it is hard to know what to buy (or what you can afford). What are some of the things you should look for?

I love property. I’ve always had a bit of a property bug. I grew up learning from my mother, who loved property and property investing. It was something we talked about at the dinner table growing up. I developed a competitive love of monopoly from an early age, something my six-year-old son has learned from me. He is known to slam doors when he doesn’t win – we are still working on good sportsmanship!

Every property is different. Each property has its own story and unique advantages or disadvantages. Even in a complex, no two properties are the same. These are some of the things I consider when looking for a home to live in.

1. Lifestyle

Buying a home is different from purchasing an investment property. You plan to live there, so it needs to be somewhere that suits you and your lifestyle. When I talk about lifestyle, I’m not talking about the lifestyle of the rich and famous, unless you can afford it! Instead, by lifestyle, I mean something that suits how you live, your family structure, and what’s important to you. For instance, after I got divorced, I purchased a secure apartment. It is walking distance to a quality primary school and meant I could drop off the kids and then cycle to work. It also meant I didn’t have to spend much time doing maintenance. Now that I have remarried, my husband and I are mulling up retirement plans – he wants to move somewhere warmer, and I would like to have a vegetable garden.

2. Location, location, location

When buying a home, it is important to think about where it is and where you need to be. That beautiful estate sitting atop a mountain might score you Instagram bragging rights. But will you appreciate the romantic vista when you need to get up before dawn on a cold winters’ morning to face a long, caffeine assisted commute? Don’t trust your real estate agent’s estimate of the commute time. Instead, drive the route yourself in peak hour traffic. Even better, consider whether you can walk, cycle or take public transport to work. When I moved into my current apartment, the transport savings made it more affordable – I saved over $100 a week in petrol and parking because I could cycle or take the bus. Even better, I was able to get rid of my car altogether. My husband and I have one car between us, which saves us around $500 a week in car repayment, depreciation and registration costs.

3. Electric dreams

I had a sticky-beak at a potential investment property earlier this evening. I noticed the bold purple feature wall, the white table and chairs in the courtyard that hinted at weekend brunches, the walk-in wardrobe and modern kitchen. But I did not once think to look at whether there were efficient heating and cooling options. It was early evening, and the Canberra weather was a chilly 5 degrees outside. The agent had ramped up the heating, so it felt comfortable. But what would the real cost be to live there if it was heated like that every day? You can insulate and install new heating/cooling options retrospectively, but ideally, you want to purchase somewhere that has incorporated energy efficiency into its design from the get go. This can save you thousands every year.

4. The money pit

With a bit of effort, you can add value to a property by renovating it. The best bargains are properties that need a bit of attention, such as a new paint job, new fittings or some time spent in the garden. Maybe even a new kitchen or updated bathroom. But as much as I like the glamorous bits of renovating such as deciding on colour schemes and furnishings, I try to ascertain there are no underlying structural problems. When I was young, I used to love watching a 1980s Steven Spielberg comedy starring Tom Hanks called The Money Pit. In the movie, a young couple buys a house at a bargain price – only to find that it is falling apart and needs urgent and costly repairs. Thankfully I have never purchased a money pit, but I have often found that renovating often takes more money and timethan I expect. TV reno shows make it look easy, but the reality and true cost is often different. Make sure you have a bit of wriggle room in your mortgage facility for the unexpected, just in case.

5. Boom or bust - what is the market doing?

When I crunch the numbers on my net-wealth, I find that my own home remains my biggest and most significant investment. I bought it for lifestyle reasons, specifically to provide a safe and cosy home for my family. But I still want it to increase in value. While long term property usually trends upwards, it doesn’t all the time. I find mainstream media tends to focus more on property trends in major capital cities such as Sydney and Melbourne. But my local property market in the nation’s bush capital behaves quite differently. Rather than focusing on the hype of other markets, I observe what is happening with properties for sale. Are there many properties listed? If they are selling quickly, that is a sign of a market trending upwards. At the moment, friends at work are complaining about how difficult it is to find good rentals, which is another indicator that prices are on the rise. I also take note of urban renewal programs, such as playgrounds or new lifestyle precincts, and planning for transport infrastructure.

6. The big why

The number one question you should ask a real estate agent or vendor is why they are selling. You might assume a house is on the market because they want to sell it. But not all vendors are motivated. For instance, we recently tried to buy a deceased estate only to find that at least one of the kids was not yet emotionally ready to part with the much-loved childhood home. When you know why a house is for sale, then it helps you to craft your pitch to the agent. For instancewe purchased a unit where the sale had fallen through twice before due to the buyer having problems securing finance.We were successful over a higher offer because we could demonstrate our good financial standing.

7. Be prepared to walk away

Sometimes I find a property, and I can imagine myself there. With the deceased estate I mentioned before, I was already imaging harvesting the figs and grapes in the backyard, storing my dad’s wine in the basement cellar and picking hydrangeas to put in vases. It was in a unique location close to family, and I imagined having long lingering lunches enjoying the view. But if I had given into our dreams, we would have spent around $120,000 over what we believed the property based on our research. So we walked away at auction, and I did not give into temptation. My mother counselled me afterwards, saying that there are many more houses out there and, inevitably, you will find your dream one. Had we purchased that house, we would probably have had to work another two or three years before retiring. And we would not have been able to do as many fun things that we love, such as skiing and going on cruise trips. Once we did the sums, we were more than happy with our choice not to pursue our dream home.

Serina Bird is a single mother of two children, now remarried, who writes about saving money and living abundantly in her book The Joyful Frugalista: hundreds of secrets from a single mum turned millionaire.