February 12, 2013
Buying your first home is one of the many momentous ‘firsts’ people go through in life – up there with a first love, first job and first car. But what should you do if you have fallen in love with your dream home but affordability is holding you back from buying where you ultimately want to live?
This Valentine’s Day, by taking a different approach to buying your dream home, potential buyers may be able to achieve their property goals sooner.
The old expectation of first time buyers purchasing a home before an investment property is not necessarily the case in today’s market.
While affordability has improved of late, it is not uncommon for first time property buyers to dip their toe into the market by purchasing an investment property first. They then rent the property out and use the life lessons, possible tax benefits and any financial gains to put them in a better position to buy their first home.
This occurs especially with younger people who want to get into the property market but may have been priced out of buying a home in the area they want to live in. A clever investment property purchase and a little patience could see these homebuyers-to-be residing in their desired suburb sooner than expected.
The first step before buying any property is to do your research and make certain your financial situation allows it. Potential investors should speak to their accountant or financial advisor to ensure they are aware of the opportunities and risks involved with the purchase.
Research is the most important step before you make any decisions about purchasing a property. If you are considering buying an investment property, you want to make sure you have thoroughly investigated the property’s potential rental yield, tenancy demand and capital growth, as well as your finance options and your rights and responsibilities as a landlord.
First time buyers also need to be mindful that buying an investment property is often different to buying a home. When people purchase the home of their dreams they look for practical aspects that will make them feel comfortable living in the house. However, when purchasing an investment property, buyers are looking at whether the investment will produce a positive return and will be relatively easy to manage.
Once buyers have a better understanding of all their property and finance options they can make an educated decision about the best way to achieve their goals.
Australians’ love-affair with property doesn’t look set to abate anytime soon. But perhaps the way we view our perfect match for our first property is changing. Consider expanding your playing field to look for properties that could work well as a first investment property and that could provide the financial kick-start you need to buy your first home in a place where you ultimately want to live.