Looking To Buy A House? 10 Tips To Get You Started
Are you looking to buy a house in Australia? Whether it’s your first time to buy a property or you’re moving to a new place one thing is certain, buying a property is a serious investment that takes a lot of preparation. Buying a home might seem easy at first glance, but it actually takes a lot of thinking, negotiating and searching to ensure that you’re buying the right home (and not being sold a dud).
Here are 10 tips to get you started on your search for the perfect house:
1. Find out how much you can really afford to pay
Before you can start looking at different properties, you need to determine how much money you can realistically set aside for your mortgage payments. Sticking to your budget will save you from financial problems and possible foreclosures in the future. At the same time, knowing your budget will help you narrow your selection when you start looking at different properties.
Extending yourself financially can lead to financial ruin. It is not very fun to only be able to eat baked beans because all your hard earned money is going into your house…or worse if you can’t afford the house altogether. So be smart when setting your budget
2. Start saving for your deposit early
Once you have decided how much you can afford, then it is a good idea to start saving for your deposit. In Australia, property owners are required to pay a deposit, which is usually a minimum of 5% of the total purchase price. The ideal sum of money is over 20% deposit as this means you do not need to pay lender’s mortgage insurance.
It’s not easy to come up with a deposit, so it’s best to begin saving as early as you can.
Saving money for the deposit is very important when you’re looking to buy a house, especially because your chances of being approved for a mortgage depends largely on how much you can pay as a deposit. The more you put up for deposit, the lower your mortgage repayments will be, so save up now!
3. Start looking to buy a house on the Internet
Before you hit the road, do yourself a favour and check for properties online. This step is important, especially if you’re looking to buy a house without the help of an buyer’s agent. Checking property listing sites in Australia is easier than driving to different neighbourhoods, and looking for properties without any clue about the available options.
Property listing websites will also give you an overview of the average cost of properties, along with the available amenities and transportation options in a town.
4. Don’t be tempted to buy the first house you see
This is the first rule if you’re looking to buy a house for a good price. Never buy the first house you see, even if you really love the house and neighbourhood! Instead, make a list of your top choices then decide from there. Buying the first house
you see is a not a wise choice, especially if you haven’t seen the other options available! You’ll never know if you got the best property or the best deal if you stop searching right away.
5. Don’t be afraid of real estate agents
If you want to find your dream home, then you shouldn’t be afraid to work with real estate agents. In fact, an Australian realtor with experience in your chosen town is your best chance of buying a good property at a decent price. First time home owners looking to buy a house should definitely talk to an agent, because only agents can guide them through the whole process of buying a house.
If you are really scared then begin by talking to agents via email, then work up the courage to talk to them on the phone before finally meeting up with them in person. If you are really scared then give a fake name and number at the open for inspections, who are they to know?
6. Seriously consider a building and pest inspection
When you find a home that you like, you need to think about building and pest inspection before you close the deal. If you fail to inspect the home well, you may end up with problems and nasty surprises that may cost you money- or delay your move into the property.
It would be a shame if you find out that the property you purchased at a great discount is virtually uninhabitable because of mould infestations, gas leaks or stability problems. A good building and pest inspection will set you back a few hundred dollars, but you can use your findings to help negotiate on price.
7. Get around like-minded people
When purchasing a home, it would be best to surround yourself with others who are knowledgeable about real estate and buying homes. This way, you can learn from their experience and get tips for making the right purchase.
People who aren’t buying homes will tell you how bad the market is and why you shouldn’t buy. But if they don’t own a home what do they know! Always look at whether the person giving you advice is living the life you want. If the answer is NO then be very careful about taking their advice.
8. Read up on investment and real estate strategies from books and blogs
Knowledge is power, especially in Australia’s fierce real estate market. Hence, you should read up on all the investment property books and websites that you can find. Investing on property is tricky business, but with the knowledge of current market prices, and real estate processes, you can get a good deal.
Australian Property Investor is a great magazine, and the statistics for every suburb in Australia (found at the back of the mag) can be really helpful. You can see 12 month, 3 year and 5 year capital gains and you can also see vacancy rates and median house prices. This is extremely useful when analysing your areas.
9. Investigate the area thoroughly before buying
Before actually buying, you need to inspect the area surrounding the property. Is it a safe neighbourhood? Are their schools in the area? Is it accessible to commercial centres, hospitals, and other important facilities?
Also, don’t be content in visiting the neighbourhood once. No, you should visit it at least 3 times, and in different times of the day. Doing this will give you a feel of what actually transpires in the neighbourhood- you’ll know if the neighbours are noisy, if the main roads are congested, and if the place is safe at night. All of this should be taken into consideration when you’re looking to buy a house.
Don’t skip this step, even if you’re just planning to re-sell the property, because the type of neighbourhood is an important selling point for a property. A bad neighbourhood doesn’t mean you shouldn’t go ahead and buy the property…it could still be a great house and great investment. You just need to be aware of every aspect of your purchase before going ahead.
10. It doesn’t have to be your dream home first, start small and build up your portfolio
When you are buying a property, it doesn’t always have to be perfect, especially if it’s going to be your first home. Consider starting small, then begin building your portfolio and credit score. Buy a home that fits your budget first, and then buy your dream home after you have saved enough money.
Having several smaller homes can be a good investment, because you can put it up for rent, or even sell it for a higher price in the future. You might like to buy a house, live in it then keep it and rent it out when you move into your next house. This allows you to slowly build up your portfolio and your passive income.
Buying a house isn’t as easy as shopping for your everyday needs. Home owners and investors looking to buy a house should always consider their budget before they make a decision. If you have a family, you should also consider the needs of your children when buying a property. Remember, you’ll be spending a considerable sum on the property, so don’t make hasty
decisions you might regret.