Buying your first property is certainly exciting. As it’s likely to be the biggest financial outlay you will make in your lifetime, it’s important that you get it right to avoid any heartache and further expense in the future. Here are five tips to keep in mind, to help you avoid some of the common mistakes that people often make when purchasing their first property.
Know your budget
Once you’ve made a decision to buy a property, it’s all too easy to get caught up in the search for your dream home. Before long, you can find yourself contacting agents representing houses in sought after suburbs that are way out of your price range. To save yourself the disappointment (and time) of inspecting these properties, it’s important to set a clear budget before you begin your property search. Speak to your lender to discuss your financial situation and what you can afford. Some lenders may even give you a pre-approval loan limit. Once you have your budget set, stick to it.
Don’t overextend
When looking at the numbers, while it may appear you can now comfortably afford the mortgage repayments, down the track when interest rates inevitably change, utility and insurance bills continue to creep up, and the general cost of living increases as a whole, it may become more difficult to meet your minimum repayment amount. It’s important to keep these factors in mind when considering how much you really can afford to borrow.
Set your goals
When considering purchasing your first property, it’s a good idea to have a think about your goals. Are you planning to renovate the property and sell it for (hopefully) a tidy profit? Is the property going to be leased out so you can use the rental income to supplement the mortgage? Or is the property going to be your family home for many years to come? By having an idea of what your life is going to look like in the coming years, it will assist you to choose the property which will best suit your lifestyle, budget and needs.
Get the right advice
After you have spoken with your lender, have a budget in place, and have set some goals, where do you start looking? The internet is certainly a great place to get you started, but the variety and depth of information out there can become a little overwhelming. It’s a great idea to speak with a couple of real estate agents in the areas you are thinking about buying into. They can assist you to get a better idea of what the property market is like, both in terms of the number of properties for sale and the average price.
Arrange a building and pest inspection
When you do find a likely property, it’s essential to arrange a licensed and experienced building and pest inspection. Wollongong, Sydney, Melbourne or Geelong – it doesn’t matter if you are purchasing in a regional or metropolitan area your property is still at risk of building and/or pest issues.
A simple inspection will give you the peace of mind of knowing that your property is free from major structural or pest problems, saving you potentially thousands of dollars in the years to come.
There is no doubt purchasing a property is one of life’s biggest investment decisions. With a little preparation and the right advice, you can avoid some common mistakes and be well on your way to owning your dream home.
By Darel McBride
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