The buying & selling in the same market myth.

You often hear it said that you can’t go wrong buying and selling in the same market. But is this true? If you think about it, it can only be true if you are buying and selling in the same price bracket and the same suburb.

Of course you can’t always be in control of the timing when it comes to your need for a home. But in reality, there are a couple of “ideal” principles when buying and selling.

1. Upgrade in a falling market. As prices fall, the gap between the price of your old smaller home and your new larger home will narrow. In a rising market, the gap widens – and you have to fund this gap.

2. Downgrade in a rising market. Likewise, the gap between the price of your redundant family home and your new empty nest will narrow in a falling market – so to maximize your retirement funds you want to buy and sell when your large home is worth its maximum.

It is rare to actually manage a simultaneous transaction – there is usually some lag between the sale and purchase. Be careful that you don’t get caught out in a volatile market. For instance if you buy when the market is rising and the market falls overnight (such as what happened with the GFC in September 2008), then you get caught when you go to sell. Of course, this can work in your favour if the opposite occurs. Riding the property wave is truly a fine art… with more than a bit of luck mixed in.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Units versus townhouses – which is best to buy?

In some areas you can find townhouses and units selling for similar prices. Assuming all things are equal (size and dollar wise), I would nearly always err towards the townhouse.

There are less of them around and the complexes are often smaller, so capital growth will probably be better. In addition, a townhouse usually has more outdoor space than a unit. Often the strata levies are considerably lower as smaller complexes generally have less common areas and no expensive facilities like pools and gyms.

Of course, if it is a view you are after, you have a better chance of finding one in a multi-story apartment complex than a townhouse.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Buying off the plan or brand new

When buying a brand new apartment or townhouse the thought of being the first to live in a property can be pretty tempting. But what are the pitfalls?

History is the often the best predictor of future performance when it comes to property values. So it will be hard to gauge which properties and developments are likely to offer the best growth.

Here’s what else you can’t tell with a brand new building:
• Quality of the build (the faults will not have yet revealed themselves)
• Quality of finishes and the way they will wear
• Natural light (unless it is complete)
• Future warranty claims and possible legal battles
• How the building will be accepted/regarded by buyers in the long run
• How tightly held the building will be
• What percentage of apartments the developer will hold onto and whether they will flood the market in 5 years time

You may find you get better value in a nearby building which is only a few years old…

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Image courtesy of freefoto.com

A rising market – time to downsize!!

Look at this scenario…

This time last year, you believed your house was worth $2,000,000. Now, prices in your suburb are reported to have gained 10%, which makes your home now worth $2,200,000. You have just decided to retire and take on some consultancy work. The good news is that your next house, which would have fetched $1,000,000 a year ago, is only worth $100K* more than it was back then – now $1,100,000. So, if you downsize now, you’ll be $100,000 better off than you would have been last year and certainly better off than if you wait for interest rate rises to take effect and price growth to slow again. Time to jump!!

* all things being equal, which may not be the case if you are looking in a completely different area.

For more information on buying property in Sydney go to www.gooddeeds.com.au

Image courtesy of Michal Marcol http://www.freedigitalphotos.net/images/view_photog.php?photogid=371