The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1376 Downsizes solutions
Is downsizing really the golden ticket to a stress-free life, or just another hurdle in real estate? Join us as we challenge the conventional wisdom of downsizing with our latest insights straight from the vibrant northern beaches of Sydney. This episode unravels the complexities faced by homeowners as they transition from sprawling family homes to more manageable abodes. Dive into the story of a local vendor, who after 30 years, contemplates whether downsizing will truly offer liberation or present new challenges. With a substantial budget at play, we explore how his journey could mirror the realities faced by many in Australia's ageing population, aiming for financial gain without losing the essence of home.
As we dissect the art of downsizing, innovative strategies emerge. Discover a creative approach that offers a taste of the downsized life without a permanent leap—renting out your current home while testing out living in a smaller, similar property. This idea, pitched to our client in Dee Why, shows how trying before buying can alleviate the anxiety of such a life-altering decision. From financial manoeuvrings to ensuring enough space for family visits, we offer a comprehensive guide to navigating the potential pitfalls and opportunities of downsizing. Tune in to learn how to ensure your transition is both smooth and prosperous.
okay, we get asked about this all the time downsizes. What are their options? Where do we go? Is what they ask us. We had this discussion fresh yesterday with a really good client. We want to share some solutions with you this morning. I'm the ringleader. Doesn't have to be scary, does it, josh?
Speaker 2:Not at all, not at all. It seems to be an even bigger topic as we move further and further. It's only statistics, australia with an ageing population, and so what we'll generally see is a trend of this increasing the old downsizer into something smaller, less maintenance, generally, with lift or level ground access. Yeah, what are the options? What are, are the solutions? We had a great chat yesterday with a potential uh vendor, uh, local, local vendor, and, um, he happened to be someone that I think it was a, I think it was a house, the fisheries, uh. He was saying to us, uh, since he's been there over 30 years, he built the, built the um, the house himself, and really trying to navigate what his options are, how to paint the picture, what's the next step? Downsizes, mark it was. It was quite an interesting chat, wasn't it?
Speaker 1:look, they've got a big budget as well. Um, which is surprising. So in the northern beaches of sydney a house is, I guess, a general median house is worth anywhere between sort of 2.3 up to sort of 2.8. So these guys have almost $3 million that they're tossing around. They want to put a little bit of money in their back pocket, so they don't want to go and spend the same amount of money and move sideways financially. So they generally want to put, oh, I'd say, 300 to 500 in their back pocket for a rainy day. Plus they got their pension, which puts them at about sort of in the after you know, transactional stuff puts them in the high one millions and you would think, in the high one millions. There is a plethora of options available out there.
Speaker 2:You would. You would think so, and what we're finding a current trend of is, with these downsizes moving from the big house into the unit. They still want enough room for the grandkids or the kids to visit, so generally they are needing at least a two bed plus study or a three bedroom unit. Uh, three bedroom unit, which doesn't bring that much change these days, mark, does it?
Speaker 1:no, they definitely like to go into a one bedroom is not really an option for a couple. Um, they really want to have that, um, that third room. So I think a secret for downsizes is two and a study, like you said, or all those three rooms, with which then in our area straight away puts you, starting at one, six yeah, exactly right.
Speaker 2:And then, um, you know, then looking at even brand new uh you're looking at, so your pricing starts to edge above that two mil mark, um, uh, so you know, it does. It does make that transition for them quite hard. So I mean, one of the solutions we put together yesterday, um, for this gentleman, um in dy was, was something that was a bit out of the box, um, and and it really allows these people to get a look into what their potential future looks like, without necessarily jumping in the deep end. And that entailed, essentially, this gentleman and his partner renting out their current property and going and renting in the area or a like-for-like apartment or property in order for them to get a taste of. Do they like the area? Can they live in a unit, you know? Is it going to work for them? Is it something they want to do?
Speaker 2:So we found that to be a really well received and something that he probably hadn't thought of. So, you know, I'm going back over there today to give him a bit of an idea of, you know, property, what's it's worth if he's going to sell and make the big jump, but also, if he chooses to rent the, rent the property out, what his options are, what he's got to play with. So I thought that was a really interesting um, a strategy for buyers, sellers, just to get an under an idea of where they're going um and whether that's the right move for them look at and the rents are huge.
Speaker 1:but I don't think when you retire you think of yourself as being a landlord, so it's very counterintuitive to do something like that. But a pretty cool option because, like you said, you're trying before you're buying and, for instance, this gentleman that we're talking to was talking about going to. Where was the area Hawksnet? Where was the area you wanted to go to?
Speaker 2:I think it was Blackpool, blackpool Beach, I think it was, or Blacks, somewhere just past Swansea the area was. But he was just. You know, he's a surfer, loves to do up cars and have his own space. So I thought they went up there and had a look at the property the previous week and they just were saying you know, it's great, you know so quiet up here, beach to ourselves, that sort of a thing. And in terms of property prices as well, you know so quiet up here, beach to ourselves, that sort of a thing. Um, and in terms of property prices as well.
Speaker 1:You know how do you know you're gonna like it, you're gonna buy it, you're gonna spend all that money on the stamp duty, all that money on selling, and then you don't like the area. Rent it. See, if you like it, first rent out the property where you are and go and rent up north exactly right go and Go and see.
Speaker 2:I think it's about looking outside the box as to where and what your money can do for you and what it can buy.
Speaker 2:But it was a really good discussion and you almost sort of as we left, really considered the idea of renting out there and thinking, actually, you know what, that's a great idea, instead of you know ball to the hammer all in and then it either works out or it doesn't. Well, at least he's got a bit of a fail to safe because we worked out that his rents potential rent on the property would more more than cover the renter down at the, the central coast, with some spare change as well to cover any extra cost along the way. So it was pretty much a free stab into the research into the, into the idea of you know, is this going to work for me? So that's what it also really worked out really quite well the fact that it's not going to cost him anything potentially to go in to do that research and have a little look for himself to do that research and have a little look for himself.
Speaker 1:Well, I love the concept of the retirees freak out most about strata levies and I think he was saying that yesterday he was going to look, you know, after my strata water council levies. He said, you know, I could be paying $8,000, $9,000, $12,000 in council rates and strata water council. And I said to him yesterday well, how much is your house insurance? He said it's $2,400. And straightaway you saw him go oh well, I'm not paying house insurance. So I think for today, if you just tuned in, we're talking about options for downsizes. Tuned in, we're talking about options for downsizes and I do think that they won't choose the option of units or strata because they're worried about strata levies. But I really want people to have a cold hard think about what they spend in the course of a year in their house. I challenge to say it's going to be actually more than what a strata is going to be. That people won't believe me, but it is. You've got to look at every single cost, including insurances and water usage and that sort of stuff, because often the water usage in these buildings is all included in your strata usage. You don't have separate metres and then houses.
Speaker 1:You know, moving out of Northern Beaches, you know, was an option for this gentleman Renting it. He loved, I think also because he had a caravan and he'd never been around Australia. He was thinking, man, if I've got two grand a week and I'm in a caravan, I'm going to live really well over the next year. So his eyes lit up with that. But the nice thing is is you've also got your Northern Beaches house going up still. So if you rent it for one, two, three years and the value of the property goes up, you're going to enjoy that capital growth as well as enjoying the rent.
Speaker 2:Um, so not a bad idea, guys and girls yeah, not, not not a bad idea, idea at all and I think, um, you know what, where we're going to see a lot of this happen is, um, you know, probably towards it. We've got a, a, but where we're going to see a lot of this happen is probably towards it. We've got a Belrose collection, which is a sort of the first for the area. There's not much supply in regards to units and it is a heavily, heavily demographically geared to your sort of residents that have sit down and bought there and they've stayed there for the last 20, 30 years. I've met a few of them down there myself. It really is a matter of look, josh, too much maintenance. This is great. Opposite a shopping centre. I'm in the roots of where I am. Friends are close, family are close.
Speaker 1:Yeah, doctor.
Speaker 2:Everything, everything, yeah, and I think another thing that I thought we would stress as well was generally that making that first step has always been a big challenge for a lot of people I'm speaking to, has always been a big challenge for a lot of people I'm speaking to Just to get an idea of yes, you might tell me it's worth this, someone else might tell me it's worth that, but you know, sort of getting a look into what the market's real reaction to its value, and something that is an easy way for a vendor to sort of get those answers and questions answered in the form of our pre-market strategy as well.
Speaker 2:So I thought that our discussions yesterday really took to that the idea of getting some market feedback buyers through without necessarily having to financially commit or market his property. So I believe that that's been quite a bit of an important step for a lot of people. I've been speaking about just a pre-market approach approach no commitment from yourselves in terms of financial um, but you're getting that true, true value and um representation from from the market itself, without necessarily committing to a full campaign.
Speaker 1:Well, josh, it's such a geronimo jump for someone who's 70 or 75 years of age. It's such a Geronimo jump to buy and not know exactly what you're going to sell your property for. Or it's such a Geronimo jump to sell without knowing what you're going to buy. So it's really it's like do I, you know, does the dog wag the tail, or tail wag the dog chicken? Come for the egg egg, come for the chicken? You're not really sure.
Speaker 1:So I love that option that you offered him yesterday, saying don't put it to auction, don't put it on realestatecom. Let us bring for $0, let's do a pro, you know, let's professionally bring through our best buyers in our database. Zero dollars. Let's do a pro, you know, let's professionally bring through our best buyers in our database. Then at that point turn it up, pause the campaign for three, six, nine, 12 months and go right, I've got the IP information for pricing on what I need. Or double down, okay, let's do an auction or let's sell it at that point.
Speaker 1:So that sort of trial. I think there's a couple of solutions there that people could talk to their real estate agents about, not only with stock but I think with talking about Strata we've spoken about today and I think also talking about a selling solution that's not too hectic or scary for a senior or costly for some of those campaigns you may put on the market for $10,000 and then decide you're not going to sell and go. What did I go through that process for? I almost had a heart attack.
Speaker 2:Exactly right, and that's why I think it's such a great tool that we offer and service. So take advantage of it, guys, because there's no truer price and valuing on property than what someone's willing to offer to pay for it. Boom, boom.
Speaker 1:Thank you, mr Mapshot, thank you, mr Novak and congratulations on interest rates being reduced.
Speaker 2:Everybody yes yes, yes, congratulations. Hopefully a few more in store for us this year? That would be fantastic. I hope so. Have a good day, see you guys. See you us this year? That would be fantastic. I hope so. Have a good day, see you guys.