Want To Buy Your First Property? Here’s 13 Hacks You Need To Know
Buying your first home isn’t a snap decision. It can take years of planning and research – it’s one of the biggest investments you’ll make in your life. But when you do decide to take the plunge, suddenly everyone becomes an expert.
You’ll find yourself politely nodding and smiling through gritted teeth to well-intentioned advice, and scrolling through online resources that can be equally uninspiring. It’s hard to know who to listen to and who to trust, so we asked someone who’s got this in the bag. Accountant, share market trader and serial property investor, Lachlan Beaton, shares his hacks for a successful first run.
#1 Be a grumpy SOB
We all despise that person in our lives that tells us we shouldn’t buy that pair of shoes or not go on that holiday because we can’t afford it. You need to be this irritating person when it comes to buying your own property.
Spending more than you can afford on a home could make your life hell, so be your own grinch and level with yourself when it comes to how much you really can afford. You might overestimate this amount, so my advice is to take a good 10% off what you think is fair.
Jump online and find a mortgage calculator. The calculator will tell you how much your potential mortgage might cost you. By nature, interest rates go up and down a lot, so an easy trap is over committing. Make sure you are comfortable with repayments if interest rates rise 2 or 3%.
#2 Get woke
If you want to score a great buy, you have to know the difference between an opportunity and a dud. To do that, get informed. Read as much information as you can find online, and head out to property showings in the area you hope to buy. This allows you to get familiar with what bang you can get for your buck. For example, you might realise that a three-bedroom terrace house is only a slight increase in price on the two-bedroom you’d thought you wanted, but would give you better rental returns in the long run.
#3 Walk the ‘hood at night
Part of your research should take nighttime into account. There’s nothing worse than travelling overseas and ending up staying in a bad neighbourhood. “I should have done my research first, I feel unsafe here,” is a common regret we have all experienced when overseas.
The same thing applies when you buy a home. If the area doesn’t feel right, it won’t magically change in a week. You’ll kick yourself if you end up living in a street that attracts crowds or drug dealers when you want to enjoy some peace and quiet or a stroll home from a night out, in the dark.
#4 Trust your gut
On that note, your gut feeling is definitely something to trust. If you inspect your dream place but something doesn’t feel right, take heed. Your gut will always give you the kind of advice you can never receive from any friend or expert.
#5 If it’s not right for you, it’s not right for anyone
If you wouldn’t live in the place, then walk away. Chances are that you will rent the place out to someone else, at some point, and if you don’t like it, it’s likely that others won’t either. Struggling to rent your place out could end up costing you plenty of time and money.
#6 Get out of your head
Second opinions are a great way for you to get some objective advice, and always count when it comes to parting with your life savings. Friends are not as emotionally involved in the purchase and will tell you what you need to hear. Always consider the advice, as annoying as your friends might seem when they give it.
#7 Bring in the professionals
Watch enough current affairs shows this year and you’re bound to see a story about someone’s recently purchased property crumbling apart. Don’t let this be you– pay a professional (such as a builder) to inspect the place and give you honest advice.
#8 Be that buyer
Don’t just walk into the place once and sign the papers. Yes, you will be excited, but settle down, mate. It pays to return several times – you will always see new things, both positive and negative. You can also eavesdrop on other potential buyers and the agents too, you just never know what information you’ll pick up.
#9 Don’t be naïve
Agents are there for one reason: to sell the place. Whilst some are honest and helpful, others just want you to pull the pen out and sign right away to help fill their own pockets. Be friendly with them, they can work to your advantage, but don’t believe everything they say.
#10 Think transport
To buy a property that will grow in value quicker than the one your mate bought, always buy near public transport. research to see your city’s plans for future transport infrastructure, too – buying before new development begins can see you snag a bargain. Proximity to transport will increase your return on investment should you ever sell or rent the place.
#11 Be a player
The quickest win you can get away with is to pay less than what you think the place is worth. No one goes to hell for playing hard ball, so it’s time to channel Jerry Maguire and negotiate like a pro.
#12 Don’t go off the leash at an auction
Having someone you trust by your side at an auction. They are exciting places to be, and if you love the property you’re bidding on, you’ll most likely need their support to keep you on track and make the right call.
In fact, if you’re an emotional bidder, a trick to try at an auction is let someone bid for you. Give them a maximum price and walk away. Watch enough auctions in your neighbourhood and you will see people get very attached and pay way over what they think a property might be worth. A 30-year mortgage is quite a while to live with regret.
#13 Paperwork is important
Conveyancers are the ‘almost’ lawyers who look after all the paper work. And boy oh boy, is there a lot of paperwork. They don’t charge a lot but are worth their weight in gold. The best thing you can ask them to do is read the contract before you sign it. More often than not, they will alert you to things you had no idea needed your attention. Having said this, make sure you read the contract yourself to be comfortable with it before you sign on the dotted line.
Lachlan Beaton is a freelance writer, share market trader and property investor. Lachlan is a Certified Practising Accountant and worked for a number of years assessing and rating property investments for various clients. Over the past decade, Lachlan has invested in five properties, across both Melbourne and Sydney. Lachlan is also a mental health and equality advocate.