Before you buy a property, make sure you can sell it.
BY EYNAS BRODIE
Location, transport, schools, shops, hospitals, roads – the list of things th at m
ake a property worth buying is long. But there’s often one thing missing from the checklist of many buyers, and that is ‘saleability’.
We can become so consumed with where the property is, what it’s close to, its structural soundness and the price (all very important factors) that we often overlook the property’s resale potential. In other words, how easy will it be to on-sell in the future?
This may not seem like a big deal to you right now, especially if you plan on holding the property long term, but as we’ve seen in the recent downturn, people’s circumstances can change in the blink of an eye, forcing them to dispose of real estate they would have preferred to keep. And I can assure you, the last thing you want in this situation is to be lumbered with a property nobody else wants.
As a real estate agent recently reminded me, the buyers of today are a lot more in touch with what’s happening in the marketplace. These days they have access to all sorts of property data, including the sales history of individual properties. With a few clicks of the mouse, they can look up what you paid for your property and when you bought it. Add to that the fact that we’re in a buyers’ market, where buyers are spoilt for choice.
If there’s something about your property that turns them off, it’s easy for them to walk away because they know there’ll be plenty of others to consider.
All of these things conspire to make it difficult for sellers if there’s even one flaw in the property they have listed for sale.
There are any number of things that could cost you a buyer: previous termite damage, an easement on the property, an unapproved extension, the adult shop down the road, the rental property next door with six cars in the driveway – the list goes on!
Take the recent Queensland floods for example. There have been many property owners conducting fire sales of their flood-affected properties, some of them in esteemed suburbs that might otherwise be unaffordable to gain entry into. While you may see an opportunity to pick up a bargain, make sure you think about if and when you have to sell this property in the future. With flood information readily available nowadays, your future buyer will no doubt discover that the property was affected. Will they still want to buy it from you? Even if they do, will they give you what you want for it?
I have walked away from more than one property deal based on the outcome of the building and pest inspections, not because I was frightened away by the findings, but because I knew that these were issues that would surface again when it came time to sell, and that was a headache I didn’t want.
Between having to hold open inspections, running a marketing campaign and competing with other sellers, selling a property is a stressful enough business without having to worry about how buyers will respond to your property’s imperfections.
So even if the property has a flaw that you’re perfectly happy to live with or you don’t consider a big deal, give some thought to how others might feel about it, and ask yourself: ‘how easy will it be for me to sell?’
Have you found out something about a property you were interested in that turned you off of buying it? Let us know what your property ‘deal breakers’ are.
Eynas Brodie is the editor of Australian Property Investor magazine,