So you’re thinking of buying your first property, perhaps to live in, or as an investment property. This is a huge step, and one which will likely put you on the road to long-term financial security. Buying into real estate is a great investment for your future.
However, you are probably feeling a little daunted and maybe even overwhelmed by the whole process. There is certainly a lot to think about: property values, mortgages, fees, interest, building inspections, the list goes on. Here are our top 4 tips for buying your first property so you can navigate this process with ease and secure the best investment for your future.
1. Have Your Finances in Order
You may be in a hurry to buy you first house, but it is better to wait until the time is right and you are in a strong financial position, than to rush into a decision which puts you under financial debt. Firstly, you will want to make sure that you have paid down any other debt you have. A mortgage is a large commitment so you do not want to be juggling multiple debts at the same time. You also want to save up a deposit, and the larger the better. Having a large deposit not only means that you will pay less interest over the life of your loan, but you may also avoid extra fees such as mortgage insurance.
Finally, make sure your savings are enough to cover unforeseen costs and expenses. The process of buying a house, not to mention home ownership, can involve a lot of costs, some of which may be a surprise. There are a variety of transaction fees, brokers fees, and taxes associated with buying the property that you will need to cover. You may also be confronted with unforeseen maintenance and repair costs on your new property, so you should be prepared for this also.
2. Shop Around For the Best Loan
When it comes to home loans, there are an incredible amount of different options available. The mistake some people make is going to their bank and taking whatever mortgage they offer to them. However, banks and financial institutions only offer options from their own range of products, so in doing this you are precluding yourself from all the other options on the market, including some which may be more favourable to you.
For this reason, it is important to shop around and get as many different mortgage options as possible. You can apply for pre-approval on as many loans as you want without it affecting your credit rating. Working with a mortgage broker can be helpful with this: brokers are independent and therefore will make a recommendation based on the market as a whole, rather than a narrow range of products. They may also take on the time and hassle of doing the leg work to find the best mortgage for you!
3. Research the Location
When you are deciding on the location of your new property, there are two major factors to keep in mind. Firstly, if you will be living in the house, you want to make sure the neighbour is right for you. Look at different neighbourhoods to find ones where you will be happiest: think about factors such as amenities, public transport, highways and infrastructure, schools districts, and the sense of community and general vibe there. Once you find somewhere you think you want to live, spend some time there to make sure it is the right fit: shop at the mall, eat at local restaurants and play with your kids in the park.
Secondly, you want to make sure the area you are buying in represents a good investment. Growth in property values can vary greatly between neighbourhoods so consult with experts to see which areas are set to increase in value in the years to come. If you are buying an investment property, think about the likely returns on your investment: what is the average rent in the area? What is the current occupancy rate for rental properties? Think about similar factors to above, that is, the things which make people want to live in a neighbourhood, will also tell you whether it is attract to renters.
4. Tips For Investing Overseas
Buying into the international real estate market can represent amazing potential investments, but is an even more complex process. You can find incredible deals on property in foreign real estate markets, especially if you do your research and buy in at the right time. If you play your cards right, emerging markets, economic growth and favourable currency conversions can be a winning combination for incredible returns on your investment.
You can look at a property finder for Dubai and other major foreign real estate markets to check available properties as a first step. Be sure to seek expert advice, and consult with a local lawyer or broker to make sure you comply with all relevant laws and regulations.