The rules for buying better compact housing investments
Living in compact housing is becoming more popular across Australia due to our changing demographic makeup and lifestyle expectations.
Demography
Every second household in Australia currently supports either one or two people. Let me repeat, 51% of households, according to the 2011 Census, held just one or two people.
It is forecast that this proportion of one and two person households will rise. Some estimates are that two-thirds of Australia’s homes will support singles or couples within a generation.
We are not just talking about the Gen Y rental markets here, but owner-resident households too. This trend is even more pronounced for aging baby boomers and their first generation parents.
Lifestyle
Our time-short lifestyle is making the increased commuter time from ‘home’ to ‘work’ to ‘play’ (whether by car or public transport) less acceptable.
The increasing cost of long private commutes (petrol, car maintenance and insurance etc.) and the need for several cars is making the idea of a ‘go-card’ and public commutes/walking/cycling more appealing.
The most important consideration in any new investment property purchase is who is likely to be the next owner after you.
The lag in infrastructure provision to outlying new suburbs is adding additional strain on a public which increasingly wants more now. Waiting for things (like neighbourhood services and amenity) is no longer part of our creed.
We, as a nation, by and large, seem happy to trade ‘space’ for ‘place’.
Creating place
I often repeat this simple phrase – “density needs to be offset”.
If we are going to live in a more compact dwelling space, then that space itself, and what surrounds it, needs to better than if our home and private yard was much more voluminous.
I am not staying that detached homes are potential dumps or that living on acreage is akin to being in a pigsty*, it’s just that the room for error is far greater in tight confines.
If I have learnt anything from watching those property shows on Foxtel, it is that space is often working against you when it comes to small builds.
Better buying
Compact housing design, like for apartments, must be clever in its use of space; finishes; building amenities and services.
One of the keys to better housing investment is to match the aspirations of the resident now and into the future. The most important consideration in any new investment property purchase is who is likely to be the next owner after you. It’s the next buyer who determines your capital growth potential and in most cases it is best if that next buyer is an owner-resident.
So what are some rules to buying a better compact dwelling?
- Space
Now this may sound like an oxymoron, but one should always buy as much space as one can afford.
There are basic human dimensions that can only be compromised so far. For example, living areas must allow for residents and guests to easily move around. One needs to be able to walk around a queen sized bed.
You do need to do the three S’s (shower, shave and s… well you get the picture) in a bathroom.
Kitchens aren’t just places for Clooney coffee machines, they need workable bench space, multiple storage options; good lighting and a full suite of appliances. - Natural light and ventilation
Think energy efficiency. The best way to do that is via natural light and ventilation. All glass should be full floor to ceiling, designed to ensure privacy. - Ceiling height
Space should not only be judged on floor area, but also by ceiling height. It’s the perception of space that is important, not just the overall metereage.
Buy apartments with a minimum ceiling height of 2.6 metres, over 2.7 metres is better still. - Lighting and ceiling type
Down lights recessed into a plasterboard ceiling.
The plasterboard ceiling creates an air gap between the concrete slab structure and room itself. This creates an important acoustic barrier that lessens noise from the apartment above.
Make sure there is enough lighting in the kitchen; bathrooms and laundry area. - Hard floor finish
Carpet is out and tiles or timber is in when it comes to living areas. Carpet in bedrooms is still strongly favored. - Great kitchens
The kitchen is usually the ‘centerpiece’ of one’s home. But when it comes to compact living, the kitchen’s status has lifted to ‘showpiece’. Let’s get a bit specific here, kitchens should incorporate:
Stone bench tops and high quality splash backs;
Designer cupboards and drawers – in fact the more drawers the better;
High quality appliance package with cooktop, oven, range hood, dishwasher, convection microwave and refrigerator – yes a microwave and fridge;
Good task lighting is vital - Functional bathrooms
When it comes to local moves, one of the most cited reasons why is that the bathrooms weren’t practical.
Bathrooms need to have:
Sizable showers with detachable shower rose;
Mandatory WC;
Vanity with sufficient storage and shelves;
Floor to ceiling tiled walls;
Natural light and direct ventilation if possible – i.e. operable windows;
Several towel rails;
Include stand-alone bath if space permits - Separate laundry
A dedicated laundry area that is well ventilated and capable of linen and appliance storage - in fact the more storage the better. - Storage Think about those designer closet advertisements you see in the weekend papers or on TV.
Storage is king when it comes to compact living. The better the storage space the better your tenant and owner-resident resale appeal. And this is the one area that most developers – like nearly all of them – don’t do well.
Sadly, most aren’t even interested in addressing this issue. - MPR
One bedroom apartments – for example - can sometimes be a room short. A small multiple purpose room or study has a variety of uses for a one or two person household. It should be large enough to have a single bed, study desk and some robe space. - Good sized balconies
A well-proportioned balcony not only allows for outside private entertaining, but allows the ‘outside in’. The balcony should be able to accommodate a six seat table setting and room for a small BBQ. A glass up stand is much better than a solid balustrade. - Aspect and view
The most preferred aspect is north, but there are occasions where south, east and west can have a more appealing outlook and view. An inviting view is a strong lifestyle and resale benefit. - ASC
All living areas and all bedrooms these days should have individual air-conditioning. Key card or intercom security to building and apartment floor is also mandatory. Any new compact home should be capable of access to the NBN or broadband wireless. - Car parking
One car per apartment is the minimum required to have future owner-resident appeal. When it comes to the provision of visitor car spaces, one per four apartments is ideal. - Lifts
Lifts and their operation are vital when it comes to apartment living. A good lift service with access to basement carpark is one lift per 50 apartments. - Recreational facilities
Residents and guests always appreciate a common area incorporating a swimming pool and deck. Other meeting areas are also highly regarded. A great foyer works wonders but gyms are better done offsite these days. These rules apply always. But become vital when looking at buying in a crowded market. Our property pick rules also apply.
Good investing.
*I live on acreage in Brisbane’s west and let me tell you space allows one to hide a multitude of property sins.
Our thanks go to John Egan, Egan Property Solutions, for his collaborative contribution to this article.
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