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Are all homes created equal when it comes to ensuring a good financial return?

Whether you’re purchasing your forever home, or wanting to maximise returns on an investment, when you purchase property you’re looking after your financial future.

Old, new, and in-between, all properties have their challenges and opportunities to make or break the bank. The question is, are all homes created equal when it comes to ensuring a good financial return?

The ‘sound investment’ checklist

  • There are some characteristics buyers should look for in any property, regardless of the age or style of the property and whether they intend to live in it or not.

    Purchasing in established or up-and-coming areas with great infrastructure, schools and public transport will ensure your property stands the test of time. You can also speak to an experienced real estate agent who can give you an idea of the suburbs you are interested in.

    A structurally sound property with high ceilings and a functional layout can be tailored to suit almost any taste, so purchasing a house with ‘good bones’ rather than the best aesthetic makes for a better investment too.

Heritage, mid-century or modern – what are the make or breaks?

Terrace

  • In Australia, terraced houses generally refer to Victorian and Edwardian era homes built in neat rows. Terraced houses often feature charming exteriors; these desirable properties are often found in busy inner-city suburbs close to the hustle and bustle.

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  • Often long and skinny with each room separate from others these historic gems, however, can typically be easily renovated towards current trends of open plan living by removing walls between kitchen, living and dining rooms

  • Compared to stand alone houses or semi-detached options in the same locations, terraced properties can be relatively cheaper

  • With more internal walls than other types of properties, you should save on energy bills, but still benefit from a small garden or yard

    BREAK:

  • Terraced houses share internal walls, but living in such close quarters to your neighbours is not for everyone

  • The structural problems of your neighbours could become yours over time, so always consult with your neighbours about any concerns

  • Many councils will have strict rules preventing you from altering the street frontage (but this shouldn’t stop you from being able to renovate the interiors)

Heritage

  • Heritage listed homes are often unique and filled with character. However, if you’re thinking of purchasing a heritage listed house, or are already living in one, there are some special considerations if you want to maximise your investment.

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  • Heritage homes are often distinctive and beautiful, with well-maintained period features such as double brick walls and original window panes attracting buyers

  • Where there is one there are often many – heritage homes tend to be clustered together making for beautiful neighbourhoods

  • As an owner, you may be eligible for grants or loans to help fund the maintenance of the property, and if well maintained, the property will retain its appeal and potentially grow in value with age

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  • A property becomes heritage listed because it is unique, historically important or has architecture that is worth persevering, making it harder to renovate the property due to more significant restrictions to keep the property intact

  • If you can get renovations approved, they can be costly as you will need to use specific materials and specialists who understand the rules and regulations

  • Home insurance can be harder to attain for heritage listed properties, especially if the type of property is rare. So make sure to investigate before purchasing

mid-century-modern-home-open-floorplan-outdoor-furniture Mid-century homes are known for an emphasis on the outdoors and a minimalist style

Mid-century

  • Mid-century modern architecture rose to popularity in the 1930s through to the 1960s, and its experimental design features have resonated over the decades since. Known for an emphasis on the outdoors and a minimalist style, many mid-century homes feature internal and external glass-walls.

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  • Most mid-century homes were built with quality materials and workmanship that will continue to endure

  • If you choose to rip out old carpet, many mid-century properties will have timber flooring that will polish up nicely, especially if they’ve been covered by carpet for many years

  • Mid-century homes are generally built on large blocks, featuring sizeable front and back gardens or room to extend

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  • A timeless blend of 1950s and 60s style, mid-century properties also come with the asbestos risks of the time. For the safety of your family, if there is any damage or exposed edges, you will need to have a certified professional remove the offending material

  • Many still have their original wiring, so investing in a good electrician to check the wiring is up to date with current safety standards and carry out any re-wiring and additional power points is an investment in the property’s future

  • Living in a home with glass-walls can create issues in controlling the heating or cooling of the house, however, this can be fixed with replacing the windows with double glazed options

1980s house

  • 80s houses are synonymous with Formica countertops, wooden furnishings and pink bathrooms.

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  • Sometimes described as non-descript modern boxes, what 80s properties might lack in character, they often make up for in being well designed with easy maintenance

  • An open plan style means a well maintained 1980s property can be comfortably modernised with some cosmetic upgrades

  • The style of home most closely suited to our current lifestyles, many will come with extras like built-in wardrobes and ensuites expected by most modern buyers

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  • Many 80s style properties will not come with double glazed windows to keep the noise out and the heat in, but this is an easy fix

  • No great value has been placed on architecture of this time period

  • Without the charm of heritage, terrace and mid-century homes, a 1980s home may need significant investment to modernise the exterior of the home

newly-built-high-quality-residential-building-glass-balcony-fences New homes can offer increased efficiency, safety and layouts that are more suited to modern lifestyles

Brand new

  • From purchasing a ready built new home, to buying off the plan or building yourself, even brand new homes can come with their own set of challenges.

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  • New homes can offer increased efficiency, safety and layouts that are more suited to modern lifestyles

  • When buying off the plan or building yourself, you may have the opportunity for some upgrades that will make great long term investments, such as quartz countertops or hardwood flooring

  • Building yourself or buying off the plan gives you the opportunity to be picky with the way space is balanced throughout the home and exteriors

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  • Be wary of some upgrades, as this is where most builders make their biggest profits, it can sometimes be cheaper to have someone come in after completion

  • With new properties it’s important to contemplate the architectural features of the property, and whether they will stand the test of time or quickly become dated

  • Technologically advanced properties can initially be appealing, however, technology ages rapidly and you could soon be left with a home full technology that is redundant or constantly needs to be updated

The opinions expressed in this article are the opinions of the author(s) and not necessarily those of State Custodians. The above is general commentary only and is not advice tailored to any individual’s financial situation. We recommend seeking advice from a mortgage or finance professional before implementing changes relating to your finances.

  • Use a calculator to get an estimate of how much you can borrow. Try one here.

  • See if you qualify. To get a more accurate idea of how much you can borrow with State Custodians, click here.

  • Call our Lending Specialists and they can do the calculation for you over the phone plus answer any questions you have at the time. Talk to us on 13 72 62.