Many people think that if you buy property in a blue-chip location, you will inevitably come out ahead regardless of what you purchase.
I help people source homes and investments within Sydney’s inner ring suburbs and Northern Beaches where high median prices and strong capital gains are hallmarks of truly blue-chip locations.
But just as the Australian property market is really a collection of many submarkets, so too a suburb is a mosaic of different property types from barely standing renovators to mega mansions on the Harbour.
Given this huge diversity, is it reasonable to assume that every property within a prime suburb deserves to be bought?
For me, the devil is in the detail. Certainly, ‘Location, location, location’ is a solid foundation for long-term financial security, but it is still possible to pick the wrong property in a premium location and end up in strife.
What’s right for you?
Before starting any property hunt – regardless of location – you must define and reconcile your own resources and goals. This is real estate buying 101.
First up, define your needs. Are you looking to purchase a home or an investment? Perhaps it is a mix of both where your home will one day flip into your investment portfolio depending on your plans for the future. It might even be something you are hoping to renovate, live in and eventually sell, or perhaps redevelop down the track for profit.
In tandem with your needs, you must understand your resources. Are you able to draw on savings for a deposit, or do you need to borrow most of the funds? Is your household income likely to improve in the coming years, or are you at peak earning with some major expenses (such as private school fees) just around the corner?
Finally, make up a list of must-haves, nice-to-haves and deal breakers. Defining your negotiables and non-negotiables makes the process of filtering through listings simpler.
For example, Balmain is a blue chip location where properties have excellent long-term growth potential. But not every property is within everyone’s means. Balmain’s median house price is approximately $1.93m. If you are looking for a 4 bedroom house and your budget is well below this figure, then you will need to re-evaluate your list of “must haves” and what compromises you are willing to make.
Ideal property selection
The majority of properties in blue-chip suburbs could be good opportunities but they will still only appeal to particular buyer types – the trick is understanding what your needs are as an owner, and what types of properties will fulfill those needs. First up, think about position. Quiet locations and desirable streets with ready access to local facilities will ensure your property is always in demand among buyers or tenants.
For example, main road fronting properties can be tough to sell unless the market is running hot. For this reason, I would generally stay well away from this type of property. On the other hand, if you are keen on enjoying the suburb’s facilities for decades to come and have a limited buy-in budget, then this budget property might be your foot in the door to your suburb of choice.
Next up, take a look at dwelling condition. Try and prioritise properties with feautures that can be easily fixed. If your budget allows for a home that is habitable but in desperate need of a repaint, new floors and some general repairs, then it might be well worth considering. In some instances, easy structural changes are a worthwhile compromise too – moving a non-supporting wall can be simple. The more significant the changes, the more you will need to consider the property’s viability in terms of your brief.
Layout and utility are also high on my list. When choosing a property for a client, I always pay special attention to the floorplan and how well it can be used by the occupants and how well it meets the buyers’ needs. For example, a third bedroom is pointless if its dimensions are less than 2.7 metres x 2.7 metres. The home might as well be described as a two-bed plus study.
Another element worth prioritising is land content. Any property that comes with extra square metres of land on title should be on your short list. This will mean choosing a duplex unit or townhouse over an apartment if budget permits. Having an asset with a good land component is instrumental in fuelling capital growth.
Scarcity is also an important element in boosting a property’s appeal. An older but larger Art Deco unit in a small block of six apartments will be a far better buy than a brand-new, single-bedroom unit in a block of 100. There is nothing unique about the newer unit compared to the Art Deco charmer.
Selecting the right property based upon location, brief and budget is where experienced buyers’ agents come to the fore. By specialising in buying property, we can define the pros and cons of each property to determine how it aligns with our clients’ needs. This is a skill earned through years of operation in the field. We can very quickly find and spot the golden opportunities that are right for you so you can take advantage and secure your new property faster.
Finding a property in a blue-chip localion that fits your needs and budget is entirely possible, but it is a tough task without a keen-eyed professional on board.
So, don’t go it alone. Contact us today to find your next property.