Buying Your First Property: the 101 Before You Jump
Whether you’re buying your first family home or diving into real estate investment for financial gain, purchasing your first property (or any property thereafter) is a big deal and potentially daunting. There’s an awful lot to plan for and think about, and trying to stay on top of it all might be overwhelming.
The key to a successful property-buying journey is to be well-prepared, researched and aware before you even start looking. Here are the 8 things that every potential home buyer should know.
It’s An Expensive Investment
Whether you’re investing with a purpose or just looking for your dream home, purchasing a property is certainly a long-term investment.
Investing smart is therefore always a good idea. Some of the most successful real estate investors are aware of factors like 1031 exchange requirements and the most optimal financing options when it comes to putting money down on a property. Being aware of your options is always a good idea.
You’ll also need to keep in mind the long-term expenses of a property investment. As an owner, you’ll be responsible for maintenance even if you’re renting.
There’s a Lot of Admin
When it comes to the legal and financial side of things, there’s a lot to be done, a lot of important documentation, and plenty of payments that will need to be made. The administrative side of property buying can be draining and frustrating.
It’s important to know ahead of time what you’re getting into, what documents and approvals you’ll need, and what you’ll be signing. You’ll be handling title documents, permissions, approvals, certificates, quotes, invoices and other documentation throughout the process, and it’s important that you stay on top of it.
Keeping all your property-related documents safe and organized in a file or binder is a good idea to help you make sure that everything is in order at all times.
Research is Crucial
Doing thorough research before you make any major decisions throughout this process is important. You’ll want to speak to professionals whenever possible to get advice, and supplement this with your own online research.
This will apply to all areas, including the type of property you’re looking into purchasing, your financing options, repairs and maintenance, the area you’re buying in, legal requirements, etc. No matter what part of the journey you’re in, the more you know, the better.
Consider Your Budget Carefully
If you’re used to renting, you need to be aware of the fact that paying off a mortgage entails loads of other costs that you’ll have to factor in, and it’s almost guaranteed that your living expenses will increase when you buy a home.
You’ll need to consider all of the upfront costs you’ll be expected to cover, transitional costs, homeowners insurance, maintenance (that’s your responsibility now) and any other fees that might be on top of your home loan repayments.
Try to plan an estimated budget with your property purchase in mind and live according to that budget for a few months before committing. This will allow you to really get a feel for whether or not you can realistically afford to make the jump.
You’ll Need Professional Help
No, no a shrink – though the stress of buying a home can be a lot to deal with. You’re going to need professional legal and financial help through the process. Aside from this, you might have some renovations and repairs in mind, which will also require professional services.
The bottom line is that paying for expert guidance is another expense that you’re going to need to factor into your budget. Don’t try to go it alone – you will make mistakes that could land you in financial or legal trouble.
Accept this as a non-negotiable expense and be willing to pay. You’ll thank yourself for it when your first property purchase goes down without a hitch.
Be Aware of Every Potential Issue
Be sure to check out the property with a critical eye before you sign on the dotted line. Any potential issues or repairs that you see will be yet another expense added to your budget as an owner.
A house with a mould problem will require a lot of maintenance. Cracked tiles, lifting floorboards or stained carpets might require you to redo the flooring in entire rooms or even the whole house. Water damage or stubborn leaks will become a pain in the neck and cost you hundreds if not addressed.
Being keenly aware of all the potential issues your new home might have will prepare you for what it’ll cost you to fix up and maintain, and it’s always better to be prepared than to be met with a nasty surprise.
Try to Be Open-Minded
When you’re house-hunting for your dream home, it’s easy to get side-tracked by superficial details. Unlike repairs or maintenance problems, the color of paint on the wall of the kitchen isn’t a major issue that should deter you from a good investment.
If you’re buying a long-term home, you’ll have years on your hands to renovate and redecorate until it meets your utmost expectations. Don’t allow small irritations like a messy garden or bathroom taps that you don’t like distract you from an amazing investment and a home you might love.
Don’t Rush It
This is a long and tiring process, but one that shouldn’t be rushed. Buying property is a huge decision and commitment, and you need to make sure you make the right decision. Take your time in choosing the perfect area to buy in and hunting for the property that meets every requirement of yours.
Waiting for the perfect home can save you money if you find something that requires minimal work at a good price. Don’t forget to leverage your negotiating power – but if a place doesn’t fit in the budget it’s not the right one for you.
Overall, being aware, planning ahead and keeping your eye on the prize are the most important mindsets to employ when house hunting. Aside from that, getting sound advice from experienced professionals will help you make sure you make the right moves at the right time.