Property / First Home Buyers Thread

[pseudonym]

Having saved up a deposit, I'm starting to look for an apartment to move out of home (finally)

My parents and older brother are helping me make sense of the conditions of loans and what to look out for when we go to open inspections

I thought I create a separate thread for posting random thoughts on this in case this topic is annoying during Covid time while people are on Job Keeper

[wendybr]

All the best with it Pseuds!  

[Smoggy]

12 hours ago, wendybr said:

All the best with it Pseuds!  

The property purchase or this thread lol?

[pseudonym]

This doesn't bode well

https://www.abc.net.au/news/science/2021-01-24/heatwaves-sydney-uninhabitable-climate-change-urban-planning/12993580

[CaptainJess]

Congrats Pseuds! Super exciting but nervous time too. I bought almost two years ago to the day. I'm currently trying to re-finance my place as my fixed rate has now expired and the variable rate being offered by my bank isn't great. I knew the variable rate it reverted to when I first applied, but the fixed rate was excellent at the time and it was always my plan to re-finance. 

If I learnt anything, it's these things:

- Get a good mortgage broker. They took care of everything and dealt with the banks directly. Saved me a bunch paperwork and time. I'm happy to pass on the details of mine if you'd like. He came highly regarded and I can see why. 

- Get a really good lawyer/conveyancer. It's the biggest purchase of your life, so don't skimp on someone who could potentially save you from a tonne of heartache. I went with a property lawyer who also came highly recommended. Cost me well over $1000 for the process, but he was methodical and was so much more professional than the cheap "package" conveyancer the seller had. 

- Following on from the second point, spend the money and get all the relevant pre-purchase reports. It was expensive but actually saved me $5000 off my purchase price because of something I found. It was recommended to get a strata report if buying an apartment. They didn't suggest a pest or building report as generally the strata report turns up info about any building problems anyway. Which in my case it did. There was an issue with some waterproofing in the garage area that potentially meant a $3-5K special levy in the future. It wasn't enough for me to can the sale but it gave me leverage to negotiate. If you're buying a house though, definitely get the pest and building inspection done. 

- Be picky and don't settle if you can. My apartment was originally $410,000. They didn't want to negotiate before Christmas, so I walked away. Apartment was still on the market in February and I used it as leverage and offered $385,000. Then got it down to $380K after I gave over the deposit. The sellers hated me in the end, but they didn't have another choice at that point. They then cracked it because I waited a day or two to sign the contract. They pushed me to sign it quicker than I would have liked but figured I had a cooling off period. Then on the day we both signed, the received a much higher offer and tried to back out of the contract. My lawyer paid for himself in that situation. Obviously if you love a place and there's other interest it's a bit tougher, but often they're more motivated to sell than you are to buy.  

- Check under the laundry sink  Did a full walk through before settlement and checked every single damn cupboard except that one. Turns out they had stashed paint and chemicals under there and didn't bother to remove them. Found out three months after moving.

Where are you looking at buying? 

[pseudonym]

Thanks for the advice Jess

I'm looking for apartments in Western Sydney (Studio to 1 bedroom) ideally in a range of $300,000 to $400,000

[CaptainJess]

36 minutes ago, pseudonym said:

Thanks for the advice Jess

I'm looking for apartments in Western Sydney (Studio to 1 bedroom) ideally in a range of $300,000 to $400,000

Look close to public transport links and amenities. Mine is a 5min walk to the train station/bus depot, 3mins from a Westfield, and just a walk up the street from a little shopping village with a post office, bakery and newsagent. Was very tempting as a buyer (resale value) and has helped with leasing it out (if you need to in the future). A lot of people that looked at my apartment to rent didn't have a car or are families that appreciated having shops and schools within walking distance. 

My budget was similar to yours. Penrith has some nice apartments and townhouses in the upper end of your budget. Lots of construction going on. My sister just bought a brand new top level, 2 bed apartment for $415K in Kingswood right next to Nepean Hospital. There's some more affordable one-bedders in the same area. Wentworthville and Greystanes are probably in the same bracket. You can get a lot for your money in Mt Druitt, St Marys or Blacktown. But if you're living there, it might be worth paying more and going to another area. Don't buy in Liverpool or Fairfield, it's overpriced and overstocked. So many empty apartments and nobody is wanting to drop their price.  

[pseudonym]

Yeah I also don't own a car. At this stage I'm looking across as many Western Sydney suburbs as possible to get a feel for what's out there.

Went to some inspection of apartments on the weekend in Merrylands.

They looked ok but the main thing I took away was that there is a lot of construction going on so if I were to go there, a lot of supply would be available.

[Smoggy]

I still look at houses in the upper mountains on domain every week....one day...one day...

Shame the majority of housing stock up there is absolute shyte quality...they all have something wrong with them lol

Edited February 8, 2021 by Smoggy

[Edinburgh]

5 hours ago, pseudonym said:

This doesn't bode well

https://www.abc.net.au/news/science/2021-01-24/heatwaves-sydney-uninhabitable-climate-change-urban-planning/12993580

Nothing to worry about 

[Carns]

Be very careful buying apartments. Particularly if they're newly built or in the last decade or so. The build quality varies widely and some of them are literally thrown together as cheaply and quickly as possible.

If it is brand new, look for cheap finishes or poor craftsmanship if you can (corners cut/sloppy work). If it is older, look for general wear and tear in the building, and whether it is maintained or literally falling apart.

So many dodgy apartments and developers around (there are good ones out there too).

I've also heard people say don't buy anything in a building over 3-4 storeys tall, but I don't really know enough to comment further.

[Smoggy]

16 hours ago, Carns said:

Be very careful buying apartments. Particularly if they're newly built or in the last decade or so. The build quality varies widely and some of them are literally thrown together as cheaply and quickly as possible.

If it is brand new, look for cheap finishes or poor craftsmanship if you can (corners cut/sloppy work). If it is older, look for general wear and tear in the building, and whether it is maintained or literally falling apart.

So many dodgy apartments and developers around (there are good ones out there too).

I've also heard people say don't buy anything in a building over 3-4 storeys tall, but I don't really know enough to comment further.

Some of the apartments built over the last 5 years are the slums of the future.

[pseudonym]

Yeah I do think about that

The only thing I heard about the over 3-4 storeys tall is that strata rates would drastically go up on the higher floors

[Edinburgh]

17 minutes ago, pseudonym said:

Yeah I do think about that

The only thing I heard about the over 3-4 storeys tall is that strata rates would drastically go up on the higher floors

The floor level shouldn't make any difference. Strata rates are divied up based on units of floor area as a proportion of the total of the development. The bigger the unit the bigger the share of strata rates/levies.

[Carns]

I think the issue is taller buildings require more structural work and can lead to more potential problems within the building over time (particularly if they have been poorly built). I remember reading it from a structural engineer who was asked to comment when the Opal building fiasco was occurring.

[CaptainJess]

My apartment block is about 10-12 years old. It’s pretty good in terms of building quality but does have some issues that come with time and overall wear and tear. 

I looked at some really old blocks and also a couple of newer ones. There are clear issues with both, which is why I tried to find something kind of in the middle. I also did the pre-purchase report for any issues.

The new ones I found particularly bad were built by Chinese developers. There’s a complex near my current house that went up in about six months and is so dodgy you can see it from the outside. It’s still sitting 3/4 empty nearly a year later.

In terms of strata, it’s a complete rip wherever you go, but I found anywhere there’s an elevator or other amenities like a pool etc. rates are sky high. That might be where the tall building thing comes from. Apparently elevators are a money pit when it comes to maintenance and repairs but it’s essential in large buildings, so they need them. I looked at an apartment in a gated complex with a pool and multiple elevators - $1600 a quarter! 

I have three levels and no elevator in my complex. My rates are still too high but not anywhere near some of the ridiculous ones I saw while house hunting. We have large gardens and 72 units spread across six individual sections of the complex, so it’s big and takes a lot of cleaning and routine maintenance. But then the strata is shared by a lot more people, so it kind of evens everything out. 

If I had my time again, I would have looked at more townhouses or apartments in smaller complexes.

There is so much crap that goes on in a large complex and it’s just stupid ****. Someone is currently parked in our visitor area and has been for more than a couple days. It’s WWIII. Then somebody leaked a small amount of liquid through one of the common areas. An emergency cleaner was requested over the weekend to rectify it (by a tenant too!). And heaven forbid the TV signal or water goes out for more than two minutes 

[Unlimited]

On 09/02/2021 at 1:20 PM, pseudonym said:

Yeah I do think about that

The only thing I heard about the over 3-4 storeys tall is that strata rates would drastically go up on the higher floors

If the building is more than 3 storeys, you are not covered by Home Building Compensation, which essentially covers for failures to commence or complete work and crappy building quality.

Anyway, I think property is massively overpriced and I am strongly considering just renting out and investing the difference. 

[Carns]

My sister rents and has purchased property interstate (Adelaide). Much better bang for buck if you're looking for an investment property for negative gearing etc. Or simply to acquire some sort of property. I, generally, would only buy in Sydney if I were looking to live in it, and even then you want to make sure you don't get completely ripped off. The Sydney (and Melbourne) markets are way overpriced. And it is only in apartments (where there is over supply) that prices look like receding at all (and that's only for some of them). As Jess and others have said, do your research, buy with a lot of amenities nearby in a decent area (and decent build quality) and it's unlikely you'll lose money on it.

[pseudonym]

Thanks for everyone's thoughts so far.

Other people have mentioned Adelaide and Perth to me.

I would consider them if I was sure I could find a new job quickly. I highly doubt I could get permission to re-locate with my current job.

My interest in apartments is due to not liking gardening, pets, starting a family.

As I'm in my early 30s, I don't think I have much time for strategies like "rent-vesting". So when I go to inspections I think about what it would it be like to be here on the weekend.

[Carns]

Buy what suits your needs. I wasn't suggesting relocating unless that is what you seriously want to do (my sister still lives in Sydney).

Another piece of advice is go to a lot of open homes to get an idea of what things cost and what you like and dislike. When my partner and I were first looking about 5 years ago (definitely the peak of the market) we viewed at least 65 different properties! I don't necessarily recommend that, but by the end we had a very clear idea of what we wanted. We bid/put offers in on at least 10 places. The market was that crazy that we kept getting outbid and prices were literally going up 10-15k/week! It got to the stage that we just stopped as it got too ridiculous and we ended up buying something a few years later when we weren't technically looking. It was a 'right place, right time' scenario and because we'd done all the work previously we knew what we wanted and could organise our finance quickly and picked up a (relative) bargain.

[StringerBellend]

Get Jess to do your negotiations, the real estate agents of the west all fear her

[CaptainJess]

I would have went to nearly that many open homes too. I looked over a six-eight month period and did the same thing. I knew my apartment was a really good one when I stepped into it. But even still, I left it sitting two months because I knew it was overpriced.

"Rent-vesting" hasn't been bad for me, but is a risk. It wasn't my objective when I bought, but now I'm doing it, I can see why people do. I have someone in my apartment paying off the majority of my mortgage and expenses while I live elsewhere in a better area and in a bigger house than what I could have afforded to purchase outright. My goal is to have the apartment paid off well down the track with me putting in as little as possible. Then I can sell when I'm older, when my kids might need a house deposit.  

It's not for everyone and there is a risk if you don't find a tenant or they leave unexpectedly, but I've been lucky and have only had a handful of weeks where it was sitting empty. 

If you're living there though, best to find a location that works for you and then try to the find the apartment. No matter how good the apartment is, if you're in a **** area or far from everything, it will start to grate on you after a while. 

[CaptainJess]

10 minutes ago, StringerBellend said:

Get Jess to do your negotiations, the real estate agents of the west all fear her

The real estate agents dealing with my sale went belly up about a month after I settled, so take that as you will Found out when they didn't come collect the for sale sign after three months. 

Balks and I don't do dodgy real estate agents. We are ruthless and play no games.