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Chapter 1: What makes a good floor plan for an investment property?
Hello and welcome along to the Property Academy podcast by Oberst Partners. I'm your host Stephen Knight.
And I'm Andrew Nicholl.
And this is the show that helps Kiwis go from zero to five investment properties so you can be financially free and stick around for the next 15 minutes because you're going to learn the perfect floor plan for an investment property, the mistakes investors always make, and when to buy a property with a bad floor plan.
Now, one of our top episodes ever was when we were talking about the perfect floor plan for investors buying townhouses. But today I want to switch things up and talk about standalone houses, normal houses. And I think this is important because when you are buying a house, the floor plan is the one thing that's really hard to change.
I mean, you could repaint the walls, you can replace the kitchen, but moving walls, depending on if they're load bearing, you know, helping to keep the roof up, that could cost you 50 to 100k or even more, right? Now, Andrew, you've walked into thousands of houses, looking at them as investment properties.
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Chapter 2: What are the common mistakes investors make with floor plans?
What are some of the things that make for a really good floor plan for property investors?
I think something that people expect nowadays, but certainly the older properties didn't have, but you really notice it now, is just being open plan. So back in the day, your lounge would be separate from the dining room and separate from the kitchen. And so you had all these different rooms. Nowadays, people aren't into that.
They want it to basically be all open so that you can be cooking in the kitchen. So if I'm thinking about, I'm cooking in the kitchen, we've got a lounge area right in front of us so I can hear what's going on.
And there might be a separate dining room somewhere else in the house or a separate lounge in the house if you've got a bigger house, but you do want to feel like it's spacious and you don't have those divisions. Now, the other big thing is where the bedrooms are.
Now, the best single-level layouts have the master bedrooms in their own different zones, and then they might push out the other bedrooms, you know, two, three, and four, down the hallway so that if the kids have gone to bed and you're watching a movie with your partner or if you're doing it in your room, there isn't any kind of noise disruption.
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Chapter 3: How important is an open plan layout in modern homes?
The kids aren't coming in going, Dad, turn the TV down. It's actually quite funny because in many ways, if I'm thinking about your house, it's kind of like that, right? The master bedroom is closer to the lounge. And then the kids' bedrooms are down the hallway a little bit more.
And even when I've been thinking about some other houses I've lived in or owned in my life, you start to be like, oh, yeah, that's very true. Because who's likely to be up last at night? It's going to be mum and dad watching TV or even if they've got friends over, right?
I mean, unless you've got teenage kids, but typically the master bedroom might be a little bit closer to the lounge and the kids bedrooms might be down the hall a little bit. And when we say a single level layout, we're just talking about a one story house, right?
If I think back to the classic house I'm going to use on the podcast, 321 Wilson's Road, because that was a house where there were lots of parts added on.
Chapter 4: What layout features enhance privacy in a home?
It was just poorly designed because of that. My bedroom for a big part of my life ran directly off the lounge and it was just because that was the only space for it. It was a conservatory that was extended and it was so impractical because I'd go to bed and I could hear the TV.
The other classic one when we're thinking about floor plans is if it's north-facing. Now, specifically thinking about the living areas facing broadly north, because then it's going to get more sun. Now, what's quite funny is if I think about my own house, the front of it is actually south facing.
And so what they've done is they've put the lounge and the kitchen at the back of the house so that the important living areas are north facing, right? Whereas if my house was on the other side of the street, then it would be north facing or the front of the house would be north facing. So you'd put the lounge and the living areas at the front of the house.
But sometimes you actually might deliberately have a house that is not north facing, right?
Chapter 5: Why is north-facing important for living areas?
So if you're in a really expensive house on the hillside in Takapuna in Auckland facing Rangitoto, which is our volcano that's out in the harbour, Well, you'd probably build the lounge and the living areas deliberately facing southeast to capture that big view because that's going to add more value. And then you'd compensate with larger windows.
And I just point this out because sometimes in New Zealand, we always have this idea of north facing, north facing. But there can be exceptions for how you do it. Because if every house like the front of it was going to be north facing, we'd have to build all of the houses on the same side of the street, right?
Yeah. And I do think so many people, particularly investors, if they're choosing from a subdivision or choosing from a range of townhouses, they always try and figure out which one's north facing. Now just remember, there's no data that I've seen that shows that properties that are north facing go up in value faster. So often architects might design them based on what actually is practical.
Chapter 6: What are the signs of a bad floor plan in older properties?
So don't get too carried away.
And actually, the next one on our list is actually one you just mentioned before about rooms connecting in odd ways.
Yeah, yeah. So thinking back to that room that just came off the lounge, that was because rooms had been added on to that house. Now, I also remember I saw a property that had been renovated where an investor had converted a kitchen into a bedroom, right? So they tried to do the standard cash flow hack of Now I'm going to make more space for a bedroom so I can get some more rent.
Now the problem was that bedroom was now, same as my house, directly off the lounge. And yep, it works, but it's a bit odd. And typically you might see that there'd be a small hallway just to kind of push it off to the side.
Chapter 7: How can a poorly designed kitchen affect a home's functionality?
But then, of course, that might mean that you've got this narrow hallway and a pokey room. So there's always this balance between having as many rooms as possible to get your rent up, but also having a nice layout, something that actually feels like it's meant to be there.
I should say as well that this is all about trade-offs, right? So if I think about my own house, when I first walked into it, I was like, why is there a bathroom right next to the kitchen? There is a bathroom with a shower and a toilet. It's actually a shub, a shower bathtub. So it's basically quite high walls.
Anyway, as I said before on the show, when I came through the house, the real estate agent got into it and was like, it's really good if you've got young kids. Really good. But
Chapter 8: What trade-offs should investors consider when choosing a floor plan?
When I looked, I was like, this is kind of weird.
Because imagine like if you're showering downstairs, then you're going to run through the kitchen and up to your room.
Well, and up the stairs, right? Because me and my wife have an en suite upstairs. But if we had kids, they'd have to go down the stairs to the bathroom and then back up the stairs and then like the guest bedroom. It is a little bit of an odd layout, right?
Is that the guest bathroom?
Well, yeah. And for like kids, once we start popping them out.
So when you have people stay, if I stayed at your house, I'd have to do the mad dash up those stairs in my towel, hoping it doesn't slip down as I was running up. Oh, no. Yeah, that's very odd. I can see now that's an odd layout.
No, you'd actually be downstairs, so it'd be a little bit more okay. But all I'd say is this comes down to money, right? I bought this house anyway because I liked the house at that price, and it works really well for us right now. If it had the perfect layout, as we're describing, it'd be more expensive, but it suits me as it is today.
And then in the future, I might pay the money to change it or I'll sell the house and move it somewhere else. And so it's just to say that sometimes if we want the perfect layout and the perfect house, that's going to mean that we're going to have to spend more money on that. And then we just have to consider, well, are people willing to pay the additional rent for that to be a good investment?
So it's just about to say, you're never going to have something that's totally perfect. Now, just before we get to the bad stuff, anything else on your list of the perfect floor plan?
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