10 Apr Bessie Hassan from Finder.com lists the top 5 features buyers will pay extra to have in a property
Bessie Hassan from Finder.com lists the top 5 features buyers will pay extra to have in a property. She also reveals the 9 big money mistakes Australian’s make and property is right up there. In fact you might be surprised to hear how much is lost on average.
Kevin: Almost half of Australians, around 47%, have admitted to making a costly money mistake. Not surprisingly, divorce is right up there, so too is making a mistake on an investment property or a property purchase. Joining me to discuss this is consumer advocate from Finder.com.au, Bessie Hassan.
Bessie, not surprisingly, divorce comes up at number one. That’s pretty sad, really.
Bessie: That’s correct. An estimated 1.36 million people have been affected by divorce and do cite this as the costliest financial mistake of their life. But interestingly, this is closely followed by losing money on a property investment. That also has affected almost 1.3 million Australians.
Kevin: Yes, I guess if we can look at it, we can associate the heart with both of these things. The heart is in the divorce and the marriage, but then I think a lot of investors make a mistake with a property by buying it from the heart as opposed to the head. They don’t make a good business decision.
Bessie: I completely agree with you there, Kevin. I do think emotion comes into it all too often unfortunately for owner-occupiers and investors alike. Buying with your heart and not your head can lead to these mistakes down the track.
Kevin: Yes, when you make a mistake with property, too, another interesting aspect out of your research was the average loss was just over $100,000. That’s a lot to lose on one property, isn’t it?
Bessie: It absolutely is, particularly in a thriving property market as it is now. You buy a property with that view that you will make a huge capital gain, so anyone losing money, particularly of that amount – over $100,000 – should really be doing their research to ensure that this doesn’t happen again or at all.
Kevin: Let’s help with a bit of that research, because there was another interesting story that I noticed came out of Finder.com.au, and that was the property wish list, the top five home features that buyers will pay extra for. What are those, Bessie?
Bessie: That’s right. We’ve surveyed more than 1000 people nationally, and coming up at the top of the wish list was actually air conditioning. Aussies would tell us that this is the most desirable property feature, and that was followed closely by covered, off-street parking.
Kevin: That doesn’t surprise me. What were the other three, by the way? You mentioned air conditioning and off-street parking.
Bessie: In third place, we had a garden, fourth place was solar panels, and then rounding out the top five was an outdoor entertaining area, so a deck or a pergola is very highly stated among property buyers, as well.
Kevin: Yes, we have quite often talked about swimming pools, and they came in I noticed at number seven, but there are quite a few investors who will actually buy a property with a swimming pool and then fill it in, because of the costs of maintaining those pools.
Bessie: Yes, that’s an interesting point, and there is very much a perception out there that a home that has a swimming pool is the dream home. It is very often viewed as that most desirable trait or feature. However, our research tells us it’s not the case, and I think you’re bang on right there, Kevin. The upkeep of keeping a pool can get so expensive. It’s not just the installation but it’s the maintenance. People tell me when something goes wrong, it’s very expensive to repair, so while it might seem well and good in theory, there’s a lot more to it. You need to do your research and factor in those extra costs.
Kevin: It doesn’t surprise me at all that air conditioning comes in at number one when you look around Australia, however I want to take another look at that. That’s from an owner-occupier’s point of view. We’ve got air conditioning in our place and we wouldn’t live without it to be quite frank, because in some parts of Australia the temperature can get up well into the mid-30s.
Bessie: High 30s, yes, absolutely.
Kevin: But from an investor’s point of view, I wonder if that would actually come up number one. If you asked purely investors whether they thought that would be something that would be desirable for them or whether it’d go down to some of the other aspects you talked about, which was the back yard, those outdoor living features for tenants.
Bessie: Yes, that’s an interesting point, Kevin. This was survey owner-occupiers and buyers. We single out investors in particular. However, previous research done by Finder does view back yards and off-street parking as the two key features for investors. A lot of these things can be put in at a later date. So air conditioning, we had a dishwasher on the list as well as a built in barbecue. They can all be put in at a later date and command more money, however things like parking and a back yard, you’ve either got it or you don’t.
Kevin: That’s right, and also with location to schools and shopping centers and so on makes it very important. In the earlier part of our conversation, we were talking about the mistakes that people make with property purchases. They don’t do enough research, they don’t think about the end user, and from an investor’s point of view, they have to think about what the tenants want that makes it more rentable.
Bessie: Definitely. In terms of renting, you absolutely do need to look at those key features and proximity to those key amenities: hospitals, schools, train stations, things like that. Again, remove emotion from the equation. If you’re buying it with the view to live in one day, even then you do need to think of the costs and the rental potential in it.
So if you are buying a property with a view to rent out, look for something with a bit of a back yard. As Aussies, we love to do our outdoor entertaining. We love barbecues, we love having people over, so anything with a deck or a pergola and a bit of a back yard will really go down well with investors and renters alike.
Kevin: Great talking to you, Bessie Hassan. Bessie is a consumer advocate with Finder.com.au.
Thanks Bessie, talk to you again soon.
Bessie: Thank you.