Buying your first home or investment property can be an emotionally charged process just like planning for your next holiday. Getting caught up in the excitement and easily distracted by the more gripping things like fun activities and what bikini to pack all while forgetting the important basics like transport and accommodation. Buying a home is the same, you may have a list of priorities in mind, but it is all too easy to ignore them when faced with a house of your dreams.
We’ve put together a list of important questions to consider when searching for your next property.
What is your borrowing power?
This first question is as easy as picking up the phone and making an appointment with us! As your mortgage broker, we’ll help you determine your borrowing power and give you a clear understanding of how much you can realistically afford to spend on your new property. In this conversation, we’ll get to know you financially. Having an accurate idea of your borrowing power will help ensure that you’re looking in the right price range from the very start.
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What are your criteria for your desired property?
It’ll be easier to research the property that you’re looking for when you have a set of criteria. With a lot of quality properties to choose from, it’s easy to fall in love with aesthetics, so it’s important to make sure that the property meets your requirements. Here are some things to consider when putting your criteria together.
- What do you need in a house?
- What do you want in a house?
- What is your main purpose or reason for buying a property?
- How long do you plan on staying in the property?
- Do you have a budget for ongoing repairs and maintenance?
- Who would potentially rent your property or buy it when you decide to sell?
Where do you plan to buy?
Whether you’re a home buyer or an investor, the aim is to purchase in a suburb with solid capital growth potential. It’s generally a good idea to buy in a suburb that is in the early stages of growth, rather than at the peak of a growth cycle. The surrounding area is also worth looking into. Get to know the local transportation situation, as well as local facilities located at a walking distance or just a short drive away. We can provide comprehensive market reports, so please reach out to us if this would be helpful for your research.
What is the condition of the property?
When inspecting the property, ensure you are inspecting both the internal and external conditions. Here are some items to include in your checklist.
- Check the ceilings for water stains and the cornices for waviness – indications of water leaks.
- If there are carpets, check the situation underneath – if there’s cement or floorboards.
- Be mindful of the evenness of the floor.
- Get in touch with us, your mortgage broker, for referrals on building and pest inspections.
- Check for cracks in the brickwork.
- Check for mildew in the eaves.
- Be mindful of cracks in the driveway.
How much does the property cost?
It’s best to compare prices with other recent property sales in the same location to make sure that you’re getting a reasonable deal. There are a lot of online resources for this, where you can research property sales in a specific location, and you could compare with other properties with comparable conditions and land size. Don’t forget to also include ongoing costs in your budget. Research the ongoing costs that will be applicable to your desired property, such as council rates, strata fees, and water costs.
What is the rental yield of the property?
Consider the average rental yield of the area and the property. This means finding out the potential rental income. If there’s a strong demand in the area, the rental yield may be higher. On the other hand, if there’s a high vacancy rate, the rental yield may decline. There are useful online resources where you can access market reports on specific areas. The data include details about median prices, growth rates, and rental yields. This part can get technical, but you can ask us for a property report and we’ll gladly explain the details to you.
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What is the history of the property?
You may want to get to know the property a little bit more by researching its history. You can trace the history of a property through online archives, street directories, council rate books, and Title Office records. It’s also important to know if the area or property has been flooded before, as this can greatly affect the property’s resale value.
Who are the professionals that you’ll need?
Make sure to consult with reliable professionals (like us) who can give you advice that’s useful in your property hunting journey. We can give you referrals and you can also do additional research. Best practice is to ask for recommendations from friends and family based on their experience with that service provider. You can also check reviews and testimonials.
We hope you’ve found these tips useful and that you soon find the property of your dreams. We can’t stress enough the importance of doing plenty of research, but we guarantee that the effort will be well worth it in the long run. If you’re ready to start your hunt for a new home or investment property, get in touch with us today to organise your home loan pre-approval early so you are ready to act fast when you find the right property.
Source: Connective Finance Focus, 2021