How To Answer Home Builders Asking: Building Own Home or Investment ?

whyisave on 06/06/2024 - 13:10

Over last few years, I've casually visited the HomeWorld display homes in this city,
and also, met some other architects or builders outside of Homeworld,
just to survey designs, what their services offer, how much it costs, etc.

Costs have definitely shot up, over the C19 years [2020 - 2023],
and all of the builders would say "Supply Chain Issues"
or "the war in Ukraine" or "Inflation is higher", etc.

One thing stuck in my mind, from all the conversations I had,
was nearly every builder would ask me:

Is this for your own home ?
or is it an investment ?

Then, depending on my answer, I felt like their poker-face would change
or they might enter my answer into their customer relationship database.

Now, I'm wondering what is the difference, whether it's an own home or an investment?

Does anyone know what the implications are?

Would the price change?

Would the builder think, that if it's an "own home", then I am going to make more emotional decisions ?

If it's an investment, does that mean, I am only focused on the sell-price ?

Home & Garden

Comments

  • Hybroid on 06/06/2024 - 13:13
    +9

    Owner-occupier generally would be more likely to want better finishes and features they can up-sell at high margins.

    Investment property you're going to want basic build and finishes so don't care for extra features or high-tech gadgetry.

    Example upgrades list: https://www.mirvac.com//-/media/Project/Mirvac/Residential/R…

    • whyisave on 06/06/2024 - 13:17

      There are some suburbs in Sydney, that if you did spend the money on higher finishes,
      on the investment property, you will definitely reap the rewards and can sell the property much higher.

      So, that's why I was thinking that the question was asked so, so, so often,
      that my answer, would funnel me down their 'customer flowchart' …
      … but I was hoping for some insights into this :-)

      • Hybroid on 06/06/2024 - 13:40
        +3

        Most investment properties are rented out to generate income, rather than just left empty awaiting value appreciation to resell.

        For a rental, you're not going to spend an extra $29,600 on a Miele Chef appliance package or $12,600 on a smart home package or $5,000 on timbergrain melamine finish to the wardrobes or drawers…

        None of these really add discernible value to the property price in 10 years time.

        • whyisave on 06/06/2024 - 14:14
          -4

          I was looking for ideas for a home build, and those were the 2 questions, nearly everyone asked.

          That's why I was asking in these forums, why it's those 2 questions.

          If the build was on the investment property, then I am not considering that decision
          as "spending extra $29,600 on Chef appliance package in a rental",
          because that's not a rental anymore…and the purpose is to demolish the investment property,
          ie. which is an old house, build a new one and then sell….because the suburb land value only keeps climbing.

          Obviously, there are CGT implications, so that's a different discussion altogether.

          • Hybroid on 06/06/2024 - 14:22
            +3

            @whyisave: I have no idea what you’re on about. You might be overthinking this too much. It’s just a question to suss out what kind of buyer you are and what up-selling they may attempt. That’s it.

    • donga100 on 06/06/2024 - 13:42
      +4

      It's definitely for this reason. In investment properties you want:

      • Industrial strength flooring that can last 50 years without replacement
      • Kick/punch resistant walls
      • Low ceilings to trigger smoke alarms faster when cooking
      • Zero security features
      • No insulation or soundproofing

      If it was for your own home the priorities would be different.

      • whyisave on 06/06/2024 - 14:18
        -1

        If it was for your own home the priorities would be different.

        Yes, the priorities would be different,
        but why would the builder's thinking
        influence my decision ?

        What if I -DO- want to include expensive options,
        build, move into that property and then sell it down the track ?

        I mean, the property could be a beach-side property?
        or it could be in a suburb where a nice looking property actually fetches top dollar.

        I was always perplexed by those 2 questions, the builder would ask,
        at the very beginning of the conversation, … and then the whole conversation mood would change,
        because of the way it was answered (especially, when the answer is a bit of Column "A" and a bit of Column "B" )

        • donga100 on 06/06/2024 - 21:36
          +3

          What if I -DO- want to include expensive options,
          build, move into that property and then sell it down the track

          Then it isn't an investment property. To the builder (and general public) "investment property" means a property built for the sole purpose of maximising rental yield %, which includes minimising maintenance expenses. There is a depreciation schedule attached to newly built homes that makes it advantageous for tax purposes to lease them for 10 years before selling. The sale price is then mostly determined by the value of the most recent lease signed.

          Whilst a house that you live in is certainly an "investment" and can achieve significant capital growth, it is not referred to as an "investment property".

      • lachhelix on 06/06/2024 - 22:17
        +1

        Why did your list make me laugh so much 😂

  • spackbace on 06/06/2024 - 13:18
    +6

    Why do you
    type like this?

    Having IVI flashbacks
    here.

    • whyisave on 06/06/2024 - 13:26
      -5

      Why do you
      type like this?

      Reading long sentences make eyes/mind 'tired'.
      Cleaner formatting in non-wide monitors.

      I don't know who/what IVI is.

      • MS Paint on 06/06/2024 - 13:36
        +4

        Cleaner formatting in non-wide monitors.

        Are you
        assuming people's
        monitors?

        • donga100 on 06/06/2024 - 13:42

          Bigot!

        • whyisave on 06/06/2024 - 14:21
          -2

          Mobile phone monitor
          vs
          Desktop PC monitor
          vs
          Tablet monitor

          • MS Paint on 06/06/2024 - 14:56
            +8

            @whyisave: Just type away normally. The browser will do all of your hard work.

            For example, you have gone out of your way adding carriage returns in your original post. It looks terrible on my phone. If you just entered the info like a normal person then we wouldn't be experiencing the issue.

            TL;DR: You are trying to fix a problem that doesn't exist.

          • larndis on 07/06/2024 - 08:15
            +3

            @whyisave: You're spacing it to fit nicely on your screen, but for everyone else it looks strange with sentences cut of half way across the screen. It definitely doesn't make it easier to read.

            As Muzeeb said, the browsers automatically adjust to best fit the words to the screen width, you don't need to manually manipulate it.

            You could look up your post on a different size screen to see what the issue is if the explanations aren't clear.

            • whyisave on 07/06/2024 - 09:31
              -3

              @larndis:

              You could look up your post on a different size screen to see what the issue is if the explanations aren't clear.

              I already understood what the issue was, for the non-desktop screens.

              I just preferred reading sentences that just didn't seem to go on and on,
              making the eyes and mind tired, and this happens a lot for desktop PC browsers.

              For smaller screens, the browser re-formats the word wraps,
              but the aim is not to just format for the browser;
              it's to ease the mind, when reading on desktop PC browsers.

              I don't know why it needs to be negged though.

              • SlickMick on 07/06/2024 - 12:15
                +3

                @whyisave: lol if you don't like wide screen, reduce the window size of your browser.

                You don't seem to be listening to advice from computing 101, preschool edition.

                • whyisave on 07/06/2024 - 13:57
                  -2

                  @SlickMick:

                  you don't like wide screen, reduce the window size of your browser.

                  The window is already running at 1/3 or 1/2 of the width of the screen.
                  The width of the browser is not the issue.

                  It's the fact, that many posts do not have short sentences (as viewed on a desktop),
                  so reading long sentences is a bit tiring on the mind (and eyes).

                  So, I write and punctuate the sentences, with the "appropriate" place for the \n

                  Geez, this thread has gone off on this tangent about wide-screens and not taking advice from "computing 101", haha

              • larndis on 07/06/2024 - 18:40
                +4

                @whyisave: well, your explanation was that you do it for 'cleaner formatting'. Everyone is telling you that it is achieving the opposite, for their reading experience.

                if sentence length is what you find 'tiring', wouldn't the answer be less words rather than the same number of words but on more lines?

                also, if the formatting is just for your benefit, how much time to do spend rereading your own posts? how much difference does it make to your reading experience when no-one else is doing it?

    • SBOB on 06/06/2024 - 13:31
      +4

      agreed..
      Worst poem ever :)

    • MS Paint on 06/06/2024 - 13:34

      What
      are
      you
      banging
      on
      about
      spackbace?

      • SBOB on 06/06/2024 - 13:41
        +1

        needs more random puncutation

        • MS Paint on 06/06/2024 - 14:16

          And a space between the last letter and the question mark. My bad.

  • Dollar General on 06/06/2024 - 13:38
    +5

    They are hitting on you

  • OhNoUShiz on 06/06/2024 - 14:39
    +1

    Maybe you need to ask back, are there any differences in terms of what you can offer if i am building a home or investment. Say along the line, I really like the new location, but unsure if i should move, depends on circumstance at that point so not sure yet. Always throw back questions to sale pitch. You will enjoy what you see on their faces. LOL

    • whyisave on 06/06/2024 - 19:34

      That's what I mostly do: throwback to them,
      eg. "does it matter if it's for investment & sale, or if it's for my own home?"

      I can always move into an investment property, after building the property,
      so I am flexible in my approach,
      but I was always curious why those 2 questions would always come up.

      • OhNoUShiz on 06/06/2024 - 20:17
        +1

        Yeah exactly i mean keep it open no point clashing in the conversation.

      • larndis on 07/06/2024 - 08:06
        +1

        What do they say when you ask why they ask?

  • Ghost47 on 06/06/2024 - 15:56
    +2

    You should say “it doesn’t matter if it’s my home or not, someone will live in it so you should build something that you yourself would be ok with living in, got it?”

    • whyisave on 06/06/2024 - 19:34

      That's a great response :-)

  • garetz on 06/06/2024 - 16:20
    +2

    Why not just ask them ?

    • whyisave on 07/06/2024 - 09:32

      I did, but they don't say the real reason.

      • larndis on 07/06/2024 - 18:41
        +1

        what fake reason do they give?

  • Nugs on 06/06/2024 - 17:24

    undecided
    .

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