Investing in your first home can be an exciting venture, but one you need to take seriously. There’s going to be a lot of factors to think about to ensure you get the home that’s right for you, especially when it’s your first home.
So lets’s take a look at my top four tips for investing in your first home.
Know How Much You Need In Savings
Knowing what you have in savings can be of particular use when it comes to tallying up the costs and the deposit you’ll need for the home itself. It’s not only the deposit that you need to think about but also about the legal costs, stamp duty, pootentially mortgage insurance and legal fees. Then there is the fact that you may need furniture and decor you’ll want to invest in when it comes to your first home.
There’s a lot more to spend on than you’d think, so it’s good to have plenty available to you so that you can be comfortable in both the deposit and be comfortable that you have spending money too. It might be that you have enough in the bank already, but if that’s not the case, then you’ll want to start funnelling in all that money into your savings so that you have the money needed when the time comes to purchase your first property!
Do Your Research
Research is an important part of buying a home because there are lots you’re going to have to do to understand the process of purchasing a home. These are things that are NOT taught in high school, and so you’re going to want to educate yourself. Look at the areas in which you’d like to live. You might find the places you were looking at aren’t possible for your budget, or you may want to have certain criteria for the location of your home such as schools or commuting time to your workplace.
Research is your key requirement before buying. You want to know in advance that not only is the property in a location that you like, but also that there are certain features that will be supportive to your capital growth ambitions. These will include being close to amenities, like schools, public transport, shopping centres etc. It’s important that you a re thinking ahead, since your first home won’t be your last, so you want to be confident that it will be easy to sell when the time comes.
Look For First-Time Buying Opportunities
As a first-time buyer, there’s actually plenty of buying opportunities that you might want to take advantage of. You can find house and land packages for first time home buyers if that’s something that’s worth considering, and there are other grants and ways of getting on the property ladder. It’s worth exploring everything that’s out there before you make the decisions that come with buying a property.
Investing in your first home is a big deal, and governments these days want to support you to get into the market. So look around for all the assistance that may be available to you, whether it is grants, subsidies, discounted interest rate packages or house and land deals. Any of these features are a great bonus for first time home buyers.
Don’t Be Afraid To Haggle On Price
When you’re putting in your offers for a home, remember to go in lower first-time around. Unless the property is a steal for what it is or it’s likely to go off the market straight away, haggle on your price. At the end of the day, you’re going to have a top price that you can pay, and you want to try and veer away from it as much as you can, only using it as a last resort. It can be heart-breaking to go in with your highest offer and get rejected, so play the game carefully.
While most people think that you make your money when you sell, it is in fact more likely you will make the most of your money, when you buy. Wait what?
A lot of people get excited when buying their first home, and this leads to overpaying. The overzealous buyer will spend more than they need or should to get the property. So to avoid this mistake, be smart and composed with your offers, it will stand you in good stead to make a much better result and therefore gains over time.
Know Your Timeline Commitments
This is one that caught me out with my very first investment property. I didn’t do the work to understand the various commitments and timeline for those commitments which added some extra stress to the transaction.
What I mean about the timeline commitments is when each part of the transaction is required.
For example, in Australia, you will need to have your deposit money approved and available within 10 days of signing the contract of sale.
Another one is ‘stamp duty’. This may not apply to all markets, but in Australia, the stamp duty needs to be paid prior to the settlement date. This is the one that caught me out. Thankfully I was able to sort it out before losing the deal, but it demonstrates the importance of knowing what your obligations are and when.
Investing in your home is important, so use these tips to help find the best home out there for your ownership.
Remember that property is a long term game, so the gains in capital growth will come over time. These gains are what you can use over time to exponentially grow your wealth. It doesn’t matter whether it is your home or an investment property, the capital growth will be key to your success.
Use these tips to give yourself the best opportunity of success, and let me know in the comments which one you like the most, or if you have any others you want to add.