If you’ve ever chatted to us about our business, our buying strategy, or real estate more broadly, you’ve no doubt heard us drop the term ‘a Milk Chocolate property’ when alluding to prospective purchases. It’s our way of referring to a property that has all the hallmarks we deem desirable.
When we purchase a property, we’re keenly aware that we’re buying a unique asset. To that end, we’ve handcrafted our ethos and buying strategies to assist our clients in achieving the greatest return on their investment. These are our clients’ insurance policies, and at any point in time, allow our clients the ability to manufacture equity and increase their yields to ensure their portfolio is working as hard as it possibly can.
As part of our buying strategies, some of the things we look for are standard and some specific to Milk Chocolate. Ideally, we want flat blocks, no pools, functional floor plans that suit modern living and north-facing living zones to maximise natural light and warmth in the home.
The scrutinising lens of our Purchasing team, headed by our Real Estate Lead Dylan Thomas, also scans for a few more unexpected details – these are often the particulars that truly signify that a property is worth pursuing.
Curious about how a property qualifies for our exacting standards? Here’s a little peek behind the curtain.
Location, location, location
One of the critical steps in our purchasing process involves leaning on robust data and research to understand an area’s past, present and future.
Some of the key things we look for include planned and proposed infrastructure projects and investment, foreseeable gentrification, and evidence of historic performance. Using thorough economic analysis, we investigate the multi-layered economic drivers that might influence a property’s long-term capital growth. We call on roughly 35 key indicators and have carefully set the thresholds to ensure the suburbs we select will provide long-term stable capital growth.
Another crucial step involves sniffing out potential drawbacks: “These are things like main roads, proximity to industrial areas or being under a flight path,” says Dylan. “We also avoid suburbs with stagnant growth or areas that might not see much development, and anything too far from key amenities. No one wants to be a 30-minute drive just to get to a café or school!”
Archetypal character
There’s a common thread that runs through many of our properties – one that’s almost immediately identifiable. We tend to opt for character homes that typify a particular area: think grand Victorian terraces around Sydney, federation dwellings in Melbourne, and quaint weatherboard cottages in Newcastle’s inner suburbs, for example. Effectively, we’re buying homes with a certain type of character that otherwise can’t be replicated.
“Character homes just have that charm that buyers love,” says Dylan. “Older homes with high ceilings, big windows and spacious rooms tend to tug at the heartstrings.”
Not only do these properties retain much of their aesthetic charm, but they also boast superior structural qualities.
“They’re usually better built and can command a premium if they’ve still got those attractive original features,” says Dylan.
Those that haven’t aged too well are also given heavy consideration in our search; a core part of our purchasing strategy involves looking for a property that we can renovate to add value.
“People love the idea of restoring something with a bit of history and personality,” adds Dylan.
A decent block with lots of potential
Another advantage of character homes is that they typically come with larger blocks. Land was significantly cheaper back when they were built, so having a sizeable garden or a garage was more or less standard. And, as we know, land is the thing that appreciates in value, not the buildings.
When we research properties, we look for those that offer above-average land size for the area. This is largely because land is where most of a property’s value lies. But it’s also because more land offers more options; it means we can look to extend a home, build a granny flat, subdivide, or simply make the most of the yard space. This is a win for the occupier, but also for the owner when it comes time to sell – each of these can add serious value to a property.
“The block’s got to have potential – a nice flat block is ideal,” says Dylan. “A good orientation helps too; think north-facing living rooms, which are perfect for soaking up the sun. We avoid oddly shaped blocks or ones with limited street frontage because they can limit future value or development options.”
If we’re purchasing an apartment, the size of the complex is a crucial factor, too. This time, however, we think small: “For apartments, we lean towards smaller blocks, ideally boutique buildings with fewer units,” says Dylan.
A quality and consistent build
Before we make a purchase, we hand over a potential property to our Construction team for a final appraisal. Their role is to assess the quality and execution of the build and examine the property to see where we can add value through upgrades or further construction. (We’re aware that our clients might never want to renovate, but knowing there are opportunities to do so will make the home more valuable in the long run when our clients are looking to sell.)
Prior to that, though, Dylan casts a discerning eye over the property. He looks for solid bones – that is, a well-constructed home with top-quality finishes. If the dwelling’s been renovated, it can’t simply be a cosmetic spruce-up; it needs to be done to the highest standard and with an element of craftsmanship. A rushed or cheap renovation with low-grade finishes and obvious shortcuts is a huge red flag for Dylan.
He also looks under the hood for some of the less-visible risks that don’t show up at inspections. Building, pest, electrical and plumbing reports are pored over by Dylan and his team to ensure there aren’t any issues that might become major headaches down the road – or that the property should be avoided entirely.
Ready to purchase a Milk Chocolate property of your very own? Contact us today.