Property duds: things that detract the most value from a home

Spotted a property bargain? Experts say you could be shooting your future self in the foot when it comes time to sell. Here’s how to know if a cheaper property is a good buy or simply a dud.

Spotted a property bargain? There’s a few things you should consider before you sign on the dotted line. While it’s tempting to settle for the cheapest home you can find given the issue of sky high property prices and limited affordability, experts say you could be shooting your future self in the foot when it comes time to sell.

So how do you know if a property really is a bargain or if it just isn’t worth that much – and how can you avoid overpaying for something that won’t be worth its weight in interest rates further down the track? Here are some of the biggest things that detract value from a home.

Living on a busy street doesn’t appeal to most buyers.

POSITION

Living on a busy street is considered pretty undesirable in most residential parts of Australia. Depending on the market, it’s not uncommon for a house on a main road to sell for $50,000-$100,000 less than one on a quiet street a few blocks away, Peter Diamantidis from Ray White Diamantidis Group St Marys said.

“Being positioned on a main road is probably the biggest (devaluing) factor,” he said.

Bronwen Lipscombe from McGrath Estate Agents Wahroonga said a lack of natural light and a poor aspect also rated high on the list of what buyers don’t want in a home.

With buyers tending to pay up to 25 per cent more for a property with a coveted north to rear aspect, an unfavourable position has the reverse effect.

Check for future road widening or plans for new traffic lights. Picture: Tim Marsden

“South or east to rear are the two least desirable aspects,” she said.

Natural light plays a big part in this. A south to rear aspect means the main living areas and backyard will likely be fairly dark for most of the day as the sun travels across the sky. In winter, this makes it cold and dreary.

“People don’t want to have the electricity running 24/7,” she said.

Noise, pollution and safety are three reasons homes on main roads sell for less.

LIVEABILITY

Principal of McGrath Surry Hills Mark Foy said train or plane noise also reduces competition among buyers, which, in turn affects the home’s value. Other factors include poor access to the house, a lack of privacy, being far from shops and being built in a low-lying location.

“It’s difficult to put a discount value on the negatives such as powerlines, busy streets, or limited natural light, however comparisons can be made between similar properties on the same street where one has sold for 5-10 per cent higher within the same period possibly due to some of these factors,” he said.

Skylights could help to brighten up the interiors. Picture: Nick Clayton.

OTHER FACTORS TO CONSIDER

You may have found a house your family can call home now – but what will living there be like in five years’ time? Mr Diamantidis said it’s important to find out what the zoning is for a property and see what the likelihood of rezoning is further down the track.

“If you have a big skyscraper built next to you, it will devalue your home because less people want to live in something that has less privacy,” he said.

The same can be said for planned infrastructure projects, such as road widening and traffic lights.

Installing more windows could make a huge difference to the value of a home with limited natural light.

“These things are going to devalue your home because they will create more noise and make accessibility harder,” he said.

Buyers should also research the history of flooding in the area and whether there have been major accidents on the street, he said.

Make sure you check the aspect of the backyard.

HOW TO ADD VALUE WHEN SELLING

If you are selling an undesirable property with poor natural light or surrounding traffic noise, there are a few simple steps you can take to boost its value and get more buyers interested.

1. Focus on what you can control – while many factors like aspect and surrounding development are out of our control, others can be tweaked with a good campaign, said Mark Foy of McGrath Surry Hills. He said focusing on presentation, marketing and price strategy will accentuate the best points of the property in order to attract more competition.

2. Add skylights – if lack of natural light is an issue, you may be able to remedy this by installing skylights or larger windows, said Bronwen Lipscombe from McGrath Estate Wahroonga.

3. Install double glazed windows – this can sometimes help to mitigate against the effects of a busy street with traffic noise, or train and plane noise, Ms Lipscombe said.