Is It Time To Buy Your First Property?
Buying your first property, whether as a home or as an investment, is an exciting undertaking and also an enormous step. Not to be taken lightly, it will require forethought, planning, consultation, and having a plan. Owning a home or investment property is a matter of great pride. You want to be sure you get it right.
How do you know if you are ready to purchase property?
Here are some considerations for first home buyers to ponder to determine whether you’re actually ready to but your first property:
- Where do you want to buy? You need to have realistic expectations; the first property you purchase will likely not be in the most prestigious suburb.
- Have you saved enough for a deposit? You need to have saved at least ten percent of the purchase price, as well as funds to cover legal fees, stamp duty, buyer’s agents’ fees (if using a buyer’s agent) and some money left as a buffer.
- Have you eliminated debts such as personal loans, student loans, credit card debts, etc? The smaller your debts, the greater will be your borrowing capacity.
- Have you sought pre-approval for a loan? Preapproval will afford you with an estimate of how much you can borrow.
- Can you realistically afford a home loan? You will not only have to pay for tax-rate dependent repayments, but also for insurance, repairs, property taxes, water and council rates, utilities, and maintenance. Additionally, moving itself can be very expensive, not to mention general cists of living.
- Buying a home or investment property is a long-term investment. Are you ready to embark on such a commitment? Is your job secure, and one you foresee staying in for the foreseeable future? If you don’t plan to keep the property for at least five years, you’re probably better off waiting to buy.
- The reality of home ownership is that it is expensive. Items break, become run down, and unforeseeable challenges occur. Things like new dishwashers, broken roof tiles, hot water system replacements, storm damage, broken windows, carpet cleaning, etc are costly and at times can be very inconvenient. If you are a tenant, these things are the landlord’s responsibility to maintain and fix. If you own your own home or investment property, the responsibility (and the hassle) is yours.
- Are you prepared for unexpected challenges? Make sure you purchase property based on your current income, rather than a projected future income level you presume you can expect to attain. Circumstances change, both job-wise and relationship-wise. Health changes. Basically, life changes. Are you prepared and positioned to adjust should the unexpected happen?
- Have you contacted a buyer’s agent? These professionals can be invaluable to you in the search for the right property and throughout the negotiation and settlement process. They take the hard work out of property searching and have access to a greater pool of possibilities. Buyer’s agents’ fees are usually very reasonable.
Considering all of these points, are you ready to buy your first property?
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