Working out your property non-negotiables

Whether buying an investment property or a home, it’s the non-negotiables that are the most important. When we commence an assignment with our clients, we place a heavy focus on the strategy component at the commencement. We map out the criteria and separate them into “must-have’s” and “nice to haves”.

In every case, our “must-haves” are our non-negotiable items.

In the case of a homebuyer, the criteria is essential to adhere to for many reasons. Primarily, it’s to ensure that our homebuyer secures the right property for them, and has no regrets about compromising on something that was initially important to them. There are many non-negotiables that come up, and often they vary from buyer to buyer. Some include bedroom minimum count, others include distance to public transport. It’s not uncommon for buyers to have a list of suburbs that they are rigid about, while dwelling era and style can be really important for the period home enthusiasts. From budget limits to yard size and orientation, the list is long.

But it goes beyond just securing the right property. It also ensures a better degree of ‘future-proofing’, in other words, finding a home for them that they are more likely to enjoy a long tenure in. After all, buying and selling can get expensive when it comes to property, and the less we need to do it, the less taxes, duties and agent commissions we need to pay.

For investors, the non-negotiables are very important too. We have a long list of items that we consider, and a range of concerns we look out for. Our plan is simple when it comes to investors, but it’s not always easy. Our role is to identify a property that will grow in value, rent with ease, and suit the target renter demographic in the area. In today’s climate, with changes to the Victorian rental legislation and tightened minimum standards, we also aim to target properties that won’t burden the owner with stress and maintenance callouts.

Most importantly, we look to secure investment properties that have “owner-occupier appeal.” The properties that attract owner-occupiers are often those that attract emotional, and competitive bidders. Often we have clients asking us to try to avoid competitive buying situations, or to avoid auction altogether. However, we explain why this is not a good idea.

Facing competition in any market can be stressful for buyers at the time, but it’s the high-scoring, crowd-pleasing properties that fare optimally over time. So when we search and inspect for investors, we do look out for all of the things that excite owner-occupiers too. This list includes, but is not restricted to the following.

• Pretty streetscape
• Great floorplan
• Useable yard/outdoor area
• Natural light/optimal orientation
• Proximity to shops/station
• No sinister building issues
• Well-run Owners Corporation (if applicable)
• Easy of street parking available (if no off-street parking)
• Access to public transport
• Quiet locale, (no main roads or adjacent train lines)
• Acceptable zoning and overlays
• No restrictive encumbrances

Managing a purchase with the non-negotiables ticked off doesn’t necessarily guarantee an investor a hands-off, easy tenure of ownership, but it certainly mitigates the risk of challenges.

For both homebuyers and investors, the most important non-negotiable relates to finance. Ensuring finance is in place, debt levels are manageable, and lender requirements are met is critical.

Banks also have their own lists of non-negotiables, and I’ve written about this topic many times. It’s important for borrowers to check their loan pre-approval conditions, and ensure that the property they choose meets the lender’s requirements.

If a lender already dislikes a property, the purchaser will one day be facing the same challenges with their sale. In addition, this compromise could hold the property’s capital growth performance back also.

Unfortunately it’s often the invisible issues that can threaten a property’s capital growth performance. But there are ways to spot the invisibles, and it comes down to due diligence.

Our non-negotiables list is firm, and for a reason.