When buying real estate, whether it be an investment property or an intended place of residence, it’s important to do your homework. Being prepared helps to make the whole process run smoothly with no hidden surprises or hidden costs that you may not have considered. I have compiled a list of important tips that all buyers should consider before purchasing a property.
1. Evaluate and assess your budget
Deciding to purchase a property is a big decision, evaluating your budget and how much you have to spend is a crucial part of the process. Researching different lenders can help you tailor your home loan to your current situation and specific needs. It’s important to consider the amount of deposit that you will require, most home loans will require a 10-20 percent deposit based on the overall purchase price of the property. So, setting a budget and getting some professional financial advice will be beneficial.
2. Consider hidden costs
There are many different costs associated with buying a property, some you will be aware of, however some may surprise you or may be unexpected. It’s important to cover all bases, here’s a list of some costs that you will need to factor into your budget –
- Deposit – generally 10-20 percent of the purchase price
- Stamp duty
- Legal and conveyancing fees
- Insurance costs
- Building and pest inspection
- Ongoing mortgage cost
- Council rates
- Property repairs and maintenance
- The cost of moving
- Loan establishment fees
- Lenders mortgage insurance
- Land taxes
- Valuation fees
3. Research and Location
Taking the next step requires research into the landscape and locality of the area that you are considering living in. What do you value the most? Consider elements such as distance travelled to work each day? Would you like acreage or a smaller more maintainable block? Are you looking to renovate or would you like a ready to live in, more modern home? Is it important to have good neighbours, a sense of community, close to shops and schools? Considering all of these factors can help you make a more informed decision about where you intend to live.
4. Talk to the experts
Real estate agents are a wealth of knowledge when it comes to information on their local area, they can give you information on sale prices, and market trends.
5. Market trends
If you’re not in hurry to buy a property then take the time to monitor market trends. Keep an eye on interest rates and pricing cycles, research when the best time of the year is to buy.
6. What you value the most
Understanding what is most important to you would have to be one of the most important aspects of investing in property, always consider –
- What is the area like?
- Are there more rental properties or more owner occupied homes?
- Will the house increase in value over the next five years?
- Distance to and from work?
- Are there schools and shops nearby?
- What are the neighbours like?
- Is it important to be close to beaches?
- Is it important to have quick access to the highway?
- Are there good hospitals nearby and quality healthcare?