It’s one of the biggest purchases you are likely to make in your life – and one of the most exciting. Buying your first home is like jumping headlong into the responsibilities of adulthood and reaping all the rewards that doing so can entail. But, before you take the leap, here are three things to consider when buying your first home.
1. Your Ultimate Goal
People purchase property for a variety of reasons and it’s important to be clear on your goals. Buying a family home is very different to purchasing an investment property, so know what you are looking for and be clear about your needs.
Ultimate property: If you are looking to purchase your ultimate family home, there will likely be a list of requirements and preferences. You may be less likely to consider capital gain and instead focus on how this house will suit your family’s needs and its proximity to other family members, school, friends, and work.
Stepping stone: Knowing your ultimate house may be a little beyond your budgetary reality, many people buy their first home as a stepping stone. In this case, you are looking for a property in an area that is likely to increase in value or that will have real capital gain with a few minor improvements. You should be on the lookout for areas that are currently cheap to purchase in but are set to go up, such as growth corridors. Key indicators may include new infrastructure such as roads and railwaysor new shopping centre developments.
Investment properties: Your first home may be bought for investment purposes only. This allows you to effectively have someone else pay off your loan through rent, and you may also enjoy some capital gains along the way. Keep in mind that investment properties should be low maintenance and in areas where rental accommodation is sought after.
Buying a property, particularly your first, requires extensive research. You should know the types of property you are looking for, the areas you would like to buy in, and what is likely to happen in the future. That means researching property values for the suburbs you’relookingat and whether they are likely to go up or down. You should also be across any future developments for that area and know the implications they might have.
You should also consult with some experts. Property specialists such as Templeton Property can help guide you through the purchasing process and make the house hunting a little easier. Their website is a great place to look for a little inspiration and information too.
3. Your Borrowing Capacity
Before you even begin the house hunting process, it’s important to know your budget. It’s also worth bearing in mind that,even if interest rates are currently low, they may go up in the future, so make sure you are borrowing within your means and you can meet repayments if circumstances change.
With some forethought, research, and clear goals, buying your first property is an incredibly exciting undertaking, and one that could set you up well for the future.
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