Choosing a Home

 In Around the Home

Choosing a Home

Buying a home is a unique purchase. It is the only large acquisition that we make that is one part financial and one equal part emotional. Alright, we admit it: it is perhaps two parts emotional and one part financial. And the emotional and financial elements intersect with each other, so that each individual buyer has their own list of unique personal preferences for what they are looking for in a home.

There are three main variables that impact on these personal preferences: location, features and price. Let’s look at each of these in turn.

Location

Most personal preferences start with location. People simply decide where they want to live first. Then they go looking for a specific house.

These are the common factors that dictate where people choose to live:

  • Amenity (simply choosing the ‘right’ suburb is very important to many people);
  • Schools;
  • Transport (public and private – i.e. road transport);
  • Parks and gardens;
  • Shopping;
  • Features such as coastline or mountains;
  • Proximity to family and friends;
  • Noise (eg how close a property is to a freeway or an airport flight path);
  • Streetscape; and
  • Proximity to work.

There is a word of caution with this last feature. Many people buy a home for its proximity to their workplace… and then change jobs. So, it pays to think not only about where a current job is located, but also where any future work might be situated. This will be easier in some occupations than in others. A police officer, for example, will have a lot of flexibility in terms of where they work. A beach lifeguard, not so much.

The Role of the Adviser

Experienced and trained financial advisers can help inform their clients’ choice of location. This is because there is usually a trade-off that needs to be struck between some of the factors that underpin the choice of location. Talking through these factors with a knowledgeable person can save a lot of time, money and heartache.

To give but one example: many people seriously under-estimate the impact, both in time and money, of living a long way from where they will spend their time. Many outer suburbs, for example, require families to own two large cars as there is no other form of transport available and services are located some distance apart. Queensland’s RACQ estimate that the average weekly running costs of a medium car are at least $11,700 a year. Now, let’s say you decide to live a lifestyle that requires one car. This means choosing a location where members of the family can use public transport or walk to either work or school. This means that the family will save $11,700 each year.

At 5% interest rates, dedicating this amount to mortgage repayments would allow an extra $170,000 to be borrowed and used to buy a home. Looked at from another perspective, you could say that the price of each car is $170,000 worth of home.

Features

Circumstances dictate many of the features we need in a home. No matter how much they love each other, a family with three children simply cannot live in a one bedroom studio. A family with four car owners probably needs off-road parking. A family with large dogs needs a backyard. The list goes on.

Other situations are more unique. A person in a wheelchair, or an older person, should typically avoid second storeys, unless the house has some easily-used way of moving between floors (for example, a lift).

Other features are more a function of preference than circumstance. Some people love 100 year old Victorian-era homes. Others want their home to be as new as possible. Some people swear by brick; others prefer the aesthetic of weather board. Families with children might like zoned living, while other families find that if the home is too large everyone lives in a more isolated way than they would like.

Common features that people look for in a property include:

  • Number of bedrooms;
  • Number of bathrooms;
  • Size and style of outdoor space;
  • Size and style of indoor living space;
  • Style of housing;
  • Car parking;
  • Swimming pools; and
  • The overall ‘vibe’ of the property.

The Role of the Adviser

Once again, an experienced adviser can help clients identify the features that they need in their new home. For example, many clients will intend to buy a house to live in for the rest of their life, but not factor in that mobility might become an issue down the track. An adviser in this situation might suggest that clients choose single storey properties that do not involve steps.

Similarly, younger clients who are yet to start a family often seriously under-estimate their residential needs after children come along. Parents of teenagers will tell you: it is not simply a case of two kids meaning you need double the space. If you want to keep liking them, then you need more than that!

Price

Pretty important one, this. This is the decisive factor for many people. No surprises here: the right home at the wrong price is actually the wrong home.

The Role of the Adviser

Working out what a client can afford is where financial advisers often make their most useful contribution. We’ve also written an article summarising the cost of buying a home.

What next?

If you are thinking about purchasing your first property, or even just working towards that goal, why not have a chat to us. We can help you with a strategy session to help you make an informed choice about your options, and get you to owning your on home that little bit faster.

 

This article is an extract from our eBook on Your Own Home. Click on the image to get access to the full eBook for free.

Your Own Home

 

 

 

 

 

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