Bargain is what the buyer makes of it

Bargain is what the buyer makes of itImage Credit: Supplied

There are always good bargains in the property industry... as long as you are skilled in creating them.

As long as a buyer or investor understands what is required exactly from a property with regard to how it contributes to his overall portfolio of investments or a desired lifestyle. Anything that delivers more in relation to that requirement or expectation can be considered a bargain.

Therefore, I contend that the vast majority of bargains are created by buyers, not necessarily delivered by sellers. And buyers, who wait for sellers to deliver bargains, are typically disappointed.

We all know that purchasing a property off-plan can provide superior capital gains by the time of completion, provided the market will continue to exhibit price increases beyond the completion date for the particular property that you are considering.

We also know that off-plan purchases are just as affected, sometimes more so, by market movements as purchases of completed assets. Careful consideration is required of variables such as estimates of economic growth, population expansion, the number of competing projects in the pipeline and the eventual industry inventory position.

In order to create your bargain, remember that fundamentals will always apply. Bargains can be generated by being smart about the ''product'' that you buy. Certain property types, with certain amenities and facilities in certain locations will be keenly sought in the future.

Location is critical and cannot be underestimated because it is a prime determinant of property value. The value of a particular location is usually derived from the levels of lifestyle convenience, pleasure, harmony, security, future economic value or even status that can be derived from owning such property.

Whether your basis for choosing is an outstanding view, proximity to dining, leisure and business districts, access to schools, hospitals or the Metro, or the 'status value' associated with a place, the perceived benefits a location may bring to a prospective buyer can account for as much as 90 per cent of a property's worth.

The key to creating your bargain is identifying these properties and negotiating from a point of view of establishing financial returns that will exceed your expectations. If you succeed, you would have created your bargain.

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Source: Mohanad Alwadiya, Special to

The writer is Managing Director of Harbor Real Estate


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