Buying your first home can be exciting and scary, if not a bit overwhelming. But there are a few rules that you should keep in mind when you are planning to buy your home. Besides helping to reduce your nerves, these rules will help you to reduce your risk when the market turns negative and in good times you could gain the maximum value from your property.
Also, with the average home costing $679 100 and price increases in some states in double digits, you want to invest wisely.
Here are five rules to help you when you are buying your home.
Don’t ignore your financial limitations
Who doesn’t want an ultra-modern apartment in the city with stunning views, but don’t overstretch your budget to buy it. Instead, buy what you can afford. Moreover, you should understand that besides your home loan, you will need to pay stamp duty, possibly insurance fees, and you will need to put some money aside for maintenance costs, and you might even need to buy furniture and appliances. It is mostly first home buyers that make this mistake and overstretch themselves, only to regret it later. So, before you venture out looking at homes, look at your budget and see what you are comfortable with.
Understand the purpose of the purchase
If you are buying a home to live in, then make sure the size matches your needs, otherwise you will need to move in a few years. So, ask yourself, how many bedrooms and bathrooms you need. To add for example a bathroom can be tricky and it can be costly.
Consider the neighbourhood and surrounding area
When you are looking at homes, you need to study the area, including the type of amenities, schools and sort of businesses that are nearby. That’s simply since the location of the home can have a massive impact on the home’s resell price. It is therefore always best to buy the worst home in the best areas than the best home in the worst area. For instance, you could renovate your home, have it decorated and the garden landscaped, but in the wrong location the growth and resale price might be weaker than a better area. So, it’s best to avoid bad locations like noisy and high-risk areas, but go for a location near local amenities in the catchment areas of good schools.
Go for a solid home with a good flow
Unless it’s a brand new home, a good idea is to have the home inspected before you sign. If there are major issues, such as structural cracks, then you might want to skip it if the repairs exceed your budget.
However, minor changes could be good as they can help with the home’s investment growth, but if you need to rearrange the whole flow of the home, such renovations can be pricey and you might not get your investment back.
Still, if the home has good bones and a good flow, by making smart alterations you can increase equity in the home.
Deal with experts
Deal with experts, such as good realtors, lenders, financial advisers and tax experts when buying your home. These experts can give you solid advice, such as the area’s performance over the past years, and to a financial adviser guiding you to find the home loan that is right for you.