The Emotional or Financial purchase

During your property journey, there may come a time when you consider a particular property because it satisfies an emotional need rather than a financial need.

An Emotional Property purchase may be:

  • Apartment
  • Holiday house
  • Farm
  • Townhouse
  • Snow chalet
  • Flat
  • House and land package

Financial Property purchase may be:

  • Period home on 700 sqm of land
  • A property where the depreciated value of the house is less than 40% of the total purchase price
  • The property located within 10 minutes walk of a train station, shops and parklands
  • Historically the capital growth of the property has outperformed the market
  • Ideally, the property has a northerly orientation to the rear
  • Has off-street parking for at least one car
  • Located in an inner-city suburb 
  • Strong residential street with limited or no commercial or high-density residential developments
  • When you bought the property, there were other interested buyers

There will come a time in your life when buying a property is about satisfying more of your emotional needs than financial needs – it’s just unavoidable. 

Some examples of emotional purchases that may occur in your lifetime:

  • A country person looking for a Melbourne apartment 
  • An overseas buyer who needs to satisfy immigration requirements and can only purchase a newly constructed home or apartment 
  • A health care worker who needs an apartment very close to their work so they can be on call 
  • Retirees who may have a place in the country yet still like to come to the city regularly, and doesn’t want a property that requires regular maintenance
  • A family buyer who wants a low maintenance property with floor plan flexibility and convenience that only comes from a new build
  • A retired person or couple that doesn’t have the physical capacity to maintain a large family home with a garden

At some stage in your life, you will have to make an emotional property purchase. However, you can still give yourself every opportunity to improve the potential for capital growth by trying to include as many of the following as you can.

Apartments:

  • Does the property have a view?
  • Is it close to trains, parks, schools, medical, shops and cafes?
  • The layout – study the floor plan carefully – does it work – does it have floorplan flexibility?
  • What are your neighbours like – can the great view be built out? 
  • Your neighbours – are they owner-occupiers or are they transient?
  • Parking – do you have on-site parking and how easy is the access, and not everyone loves car stackers  
  • Does your apartment have a pool and gym – what cost is that going to add to OC fees? 
  • High ceilings are super important.
  • A smaller block of apartments tends to hold their value better.
  • Is the orientation, light and how is your privacy?
  • Storage locker/cage. 
  • Noise – is this a quiet apartment block or a “party tower.”?
  • Owner Corporation Fees – have you budgeted for them?

Beach House/Farmlet:

  • Is your beach house within an hour and a half drive of the CBD?
  • What are your neighbours like?
  • How far from the beach are you?
  • Where are the nearest shops?
  • Where is the nearest doctor and hospital?
  • Does the property have a view?
  • Can any adjoining developments impact your property?
  • Would your property appeal as a rental?
  • Are there any immediate or ongoing maintenance issues?

Managing your emotional/financial needs when buying a property is very complicated. If you would like to discuss your property journey, please don’t hesitate to contact us at ela Property Advocates.

Guy Angwin guyjohn@iinet.net.au 0412 022 998 or GeoffBriscoe geoffbriscoe@tpg.com.au, 0419740351.

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