Why a home that has been loved and lived in can be a great investment

We help clients buy residential property with all kinds of histories; from down-sizers selling family homes to subdivided lots, from renovated period houses to rugged blank canvases.

There is one particular category of home that ensures any challenges and teething problems are minimised, and that is a home that has been loved and lived in.

Sometimes homes like this have been held for generations of one family over decades, other times they may have been extended, improved, and enjoyed for a shorter period.

Owners become vendors when something triggers a change; whether it be a death, a divorce, a decision to move, a pending birth, an upgrade or downscale.

What is consistent though is the quality of a house when it’s been loved and lived in.

Things generally work. Heaters, ovens, lights, plumbing… owners have managed life in a home that has been their sanctuary. Maintenance is usually up to date, and for house-proud owners, gardens can be bountiful and welcoming.

An industry friend of mine, Peter Karaoglanis who has written a guide for buyers called, “How to sell your Castle” shares a similar view.

“The benefits of long term ownership is that one family’s lovingly kept Castle is already prepared to become another family’s Castle.” He finds that generational homes are generally maintained for reliability and comfort. The owner typically maintains the property for the benefit of their family and friends. Peter claims, “Well maintained gardens with mature trees and shrubs almost always indicate the home itself has been maintained and improved over many decades.”

It’s homes that haven’t been lived in that can present challenges. In particular, homes that have been renovated, decorated or tizzed up for sale.

We have a popular genre of sellers in our market who are termed ‘flippers’. Flippers are quite different to professional renovators and builders who renovate and sell homes as their primary income activity, have appropriate trade skills and obtain appropriate permits and certificates.

Flippers are vendors whose intent is to sell for a profit and do so by living in the property for a short time while they renovate in an effort to avoid capital gains tax. In other words, they buy, renovate/decorate and ‘flip’ the property. To overcome the stamp duty, selling costs and renovation expenditure, they generally aim to maximise profits by working fast and on a very tight budget. And they often cut corners.

While some flips can present a quality finish, many don’t.

The purchasers may be unaware of the limited quality and functionality of some of the elements of the property, from plumbing to heating, and all things in between. Special features, such as sash windows can be a disappointment when they are painted shut because the flipper’s time and budget precluded them removing and preserving the sash’s, and then carefully prepping for a quality paint job. External painting can have deficiencies if the surface wasn’t prepped and primed properly, and in many cases, buyers can be confident that some of the little details that look on trend could be cheap products with tardy installation efforts.

Flipped properties require a building inspection.

Homes, on the other hand aren’t always handed over in pristine condition, but some of the best surprises and happiest purchaser-discoveries after settlement date occur when a much-loved home has been bought.

A past client caught up with me recently and told me glowingly that they love their new home to bits, and better still, they keep discovering little finishes and extras that the former owners had specified on the property for their own future use.

Yesterday’s auctions were in this category. Amy and I bid on six properties, five of which had been lovingly cared for and enjoyed by families.

Buying from a home-owner holds two other benefits that aren’t always considered too. One relates to Land Tax. There is no liability handed to a purchaser for the calendar year if the owner lives in the property.

And the special bonus? Good neighbours.

A friendly vendor who has loved their neighbourhood will likely have friendly neighbours. One of the best legacies a house can share with a new owner is great neighbours.

Today’s happy buyers were welcomed into their new street by the neighbours… a fine start for home ownership for them.