Sometimes it can be hard to wrap your head around the idea of “value” when shopping for a home or investment property. This can interfere with how you conduct your search because you might miss out on opportunities when you feel the price might seem high. You might also find yourself putting in a high ball offer when you let your emotions get the best of you.
This can lead to disaster if you pay too much over the market value. So how do you accurately value the properties you see? Here we explain how buyers should approach and think about understanding the value of a property.
Start with the Basics
You’ll be shopping for homes that share the basic features you are seeking. So, a good place to start is to look at those features such as the number of bedrooms and bathrooms, the living areas, the outdoor space, the master bedroom, the kitchen, etc. When you compare these basics from home to home, you’ll start to see the homes that stand out which helps add to their value.
Size Matters
When it comes to buying a home, size really matters. It’s not enough to look at how many bedrooms and bathrooms a home offers. In real estate, if you only count the rooms, you’re missing out on how much space you are actually buying. For example, a home with four bedrooms and bathrooms must be bigger than a home with three bedrooms and bathrooms, right? Wrong. It’s all about the size of the rooms, not about the number of rooms. If you look at square metres, you get a better idea of how much home you’re getting for your investment.
Homes with identical basics like the number of bedrooms, bathrooms, living rooms, etc. come in all different sizes. A large spacious home is always worth more than a small, cramped home. So considering that square metre number really becomes important to a home’s value. This is even more important when buying a house sight unseen. What looks like a large home on a virtual tour, might turn out to be lacking in square metres.
Level of Fitout
You’ll soon find when it comes to building, the level of fitout in homes varies drastically. Fitout has a huge impact on Brisbane house prices because it speaks to the quality of the materials of the home, and the investment made in creating a more functional home. Some details to consider when looking at value include:
- Is there stone on the benchtops?
- What is the quality of the flooring?
- Are the appliances state of the art?
- How high are the ceilings?
- Is a vacuum maid installed?
- Is there any custom work like built-in bookshelves or entertainment units, built in BBQ areas, custom staircases, or fireplaces, etc?
- Are the bathrooms tiled floor to ceiling or just the skirting boards?
- Is there a security system installed?
- Does the property have electric gates?
- Is there professional landscaping?
- What kind of roof does the house have?
- How is the water heated?
The truth of the matter is this list can go on forever. The trick is to understand what is considered high quality and poor quality (or non-existent) fitouts so you can more accurately determine the value of the home. Try to avoid using perceived value for fitouts if they don’t appeal to you aesthetically as this can skew the numbers a bit!
Land Size
The plot of land the home sits on also comes into consideration. Land tends to appreciate in value while the actual structure of the house itself depreciates. So larger backyards and front yards, as well as additional land, can often add more value to the home. Investors might also have the opportunity of selling off a piece of the land as it appreciates, depending on local zoning.
Location, Location, Location
It’s such a cliché, but it is so very important in real estate. In fact, even a distance of a street or two can greatly impact a home’s value. Location is so specific for Brisbane house prices that you could take two identical homes on the exact same spot of land and place them two streets apart in the exact same neighbourhood and see very different pricing when the homes are listed. So, you need to know your market and the intimate details of each street if you want to zero in on fair value for a home.
Views and Aspect
People have their preferences for the views they see from their rooms, and the directions their homes or windows face. And for the most part, this is with good reason. For example, if your home is exposed to direct sun, it will tend to heat up uncomfortably in the summer. A backyard with too much sun exposure can make it difficult to sit outside most hours of the day.
If you are staring out at the city skyline, a lovely park, or a river, you would see more value in that view as opposed to overlooking a neighbour’s unmown lawn, or a local parking lot. All of these little details can reduce or improve the joy one gets from the home. So homes with a north-facing rear yard often sell for more while some people find a west-facing rear yard greatly reduces a home’s value. All of these less obvious details can impact relative value.
Replacement Cost
Some people also look at the value differences when it comes to buying a completed home, or investing in property and building a new home. In some cases, it is more profitable to buy land in the suburbs and build a new house compared to Brisbane’s higher prices for a ready-built home closer to the city or in a highly urban downtown neighbourhood. This value varies based on the suburb and the size and fitouts of the home.
Market History
Real estate experts also consider practical considerations based on market history and median Brisbane house prices. This in hand with the other considerations provide a better understanding of whether a property is priced well or not. Ideally, you’re working with an agent that knows the property itself, other properties in the suburb and how the specific location compares to other properties in the same area. You need someone with a finger on the pulse of the most recent market movements to share their insights to help you truly understand the value. Contact Locate Buyer Agency to buy property in Brisbane
Return to our Ultimate Guide To Buying Well In Brisbane.