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What you want versus what you need

Are some features in a home really worth a higher deposit and extra repayments? Are you moving further out to get extra space you’ll rarely use?

When you’re house hunting, it pays to recognise the difference between things you actually need and those that could turn out to be expensive indulgences.

According to the Australian Bureau of Statistics, over 85% of owner-occupier homes have one bedroom more than necessary for the number of people in the house.

While it might be nice to have somewhere for family and friends to stay, remember that you’ll pay extra for that spare room.

So it could be a good idea to make a list of needs and a list of wants.  Identifying what’s essential could save you money.  And it could stop you wasting time looking at the wrong properties.

So what should you look at when drawing up your lists?

How many bedrooms?

A bedroom for you (and your partner if you’re in a relationship) is obviously a necessity. If you’re planning to have a child in the near future, they will also need a bedroom.

But do you really need a third bedroom? It might be worth it if you have guests staying regularly. However if your family only comes to visit once or twice a year, do the sums.

How do the mortgage repayments on a larger house compare to the cost of a folding bed? Or putting your parents up for a few nights in a local motel or B’n’B?

Do you need a big yard?

The price of land in Australia continues to grow. And with good reason. Land that is close to population centres that offer jobs and amenities is in demand. And it’s impossible to create any more of it.

In the case of a free-standing house, land can often make up a significant portion of the cost. So ask yourself whether it’s worth paying for that extra space out the back.

If you have children or are planning them, a big backyard might seem like a good idea. But remember that toddlers eventually turn into teenagers and lose interest in the swing set and trampoline. They’re not interested in mowing lawns either.

Ask yourself whether it’s better to have a smaller garden and a smaller mortgage? Or for the price of a big yard on the suburban fringe, could you buy a smaller property closer to the city?


What’s in the garage?

Every feature you add to a home adds to the price. The garage is one example. If you’re a tradesman you may genuinely need somewhere to store tools and equipment.

But otherwise, do you really need a place to park under cover or would you be happy parking in the driveway?

Ask yourself whether you’ll put a garage to good use or just use it as a place to store junk.

How many bathrooms?

The bathroom is one of the most expensive rooms to build. Yet it’s possibly the room we spend the least amount of time in. (Except for that spare room where grandma stays every two years.)

Would you be prepared to share a bathroom if it meant a lower purchase price? Could you live without an ensuite if it meant living closer to the CBD?

Can you compromise?

As we’ve already mentioned, as a general rule, the further you move from the city the more house you’ll get for your dollar.

But ask yourself how much time you’ll really have to enjoy those extra features. The longer commute can eat into your leisure time.

Also consider whether you’d be prepared to go without some of your wants in exchange for a lower mortgage. Ask yourself what will ultimately make you happier?

To sum up

  • Every extra feature or room has a cost that adds to your mortgage.
  • Identify what you really need.
  • Recognize the features that are merely wants.
  • Be prepared to compromise.

Calculators to help you plan

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Estimate how much you’ll have for a deposit once upfront costs are deducted.

Repayments Calculator

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