I am in my early 30s and single. I am currently renting, and would like to buy my own place. However, I don't know what I want, and don't know where I see myself in 5 or 10 years time… I would love to hear any general feedback such as should I look into buying what I now need, or should I try and predict what I may need in 5 or 10 years time? Or should I concentrate on finding a property that would make a good investment oroperty instead?
Buying a property when you don't know what you want...
poiuy1234 on 05/10/2014 - 23:54
Comments
Thanks for your comment.
Do you mind me asking if younqre looking to buy renovated or in need of renovation properties? Also, what is the oldest age of a house you would consider buying? And how long do you realistically speaking see yourself living in this house?
"I can also feel that prices are steadily going up each weekend, so the sooner you buy the better"
This is the classic mentality the RBA is concerned about. People who buy property because, it's always goes up, I better get in now.
I can't wait for macro prudential policy kicks in at the end of year.
My tip is, if u don't need to buy, don't buy. Prices do not always go up, in fact, there is better than even chance you will lose purchasing power on ur money if you do buy a house now. Not to say, money is the reason why should buy a house. Legit reasons are obviously u want to start a family, etc.
It if u are buying coz u want to invest, you are stepping into a trap, unless of course u believe joe hockey ( no housing froth here, look away, keep buying houses)
Someone described the sharemarket as similar to an air flight. You are all hurtling through space, kilometres above the earth and everyones calm until…………something happens, someone screams…….and the rush to the exits is murderous. Is it possible that in a few years someone will say "you bought what in Windsor for $960k……what were you thinking?"
Hard to tell what you will be doing or need in 10 years so all you can do is take a guess at what your situation will be then.
Be careful with your decision because the benefits for first home buyers is substantial and should not be wasted. The stamp duty exemption in itself is a big help.
Don't over commit yourself, don't forget there will be land & water rates, insurance, maintenance, etc to cover.
Do you see yourself moving in the next few years?
What is your budget?
If considering a property with a strata title do make enquiries about how they work and how people find them. I would avoid strata if possible but it is almost impossible if buying a unit.
Do not listen to anything a real estate agent tells you. Always confirm it from a trusted source.
Investment properties are good if you can find reliable tenants. A bad tennant can cost you dearly and be nothing but a pain in the ass.
As much as they always predict it, property never devalues. It will never be cheaper than it is today.
There is nothing better than living in your own place :-)
Only get a place in your name, not in partnership with a girlfriend etc. If you have anyone come to live with you get a pre-nup to protect your property first. It is too easy for romances to go wrong and partners walk away with a heap of your $$$.
Good luck.The first home buyers government scheme is limited to new builds, and it is also limited to a certain amount of money (its something like less than $600k or $750k). Most houses in major cities do not fall into this category.
Property can and does devalue. I was looking at places in 2005, and a particular apartment block on swanston st was asking 330 with 2/2/1. I had a look last night as now looking for an IP, and the same configuration, same apartment complex was asking 250. Might've had ok rental return but terrible CG.
Property can and does devalue.
Extremely rare in most normal Australian markets. If it does, there's usually a reason behind it that savvy buyers should have been investigating with appropriate due diligence prior to purchase.
Do you have a link for the 250 apartment? Don't see anything like that advertised.
ThanksDo you have a link for the 250 apartment?
I wouldn't hold my breath waiting for the answer to that…nothing that I could see 2/2/1 was under $500k.
If the arse dropped out of any property in a major Australian city to the tune of $80k over the course of the last 9 years; let alone how it failed to make a CG in the first place; whilst the rest of the market crept ahead rather nicely, you'd have to be asking yourself why? That's not rocket surgery, it's just commonsense!
My mistake, 2/1/1 was the one I was looking at. It's gone now, there's another one but 2/1/0 at $225. Still not a great buy for CG and wouldn't want to live in it, iirc it's about 40sqm but feels smaller, and many banks won't lend you a great deal because it's a tiny hole. Look up 867/488 swanston st.
A lot of good strategy has been mentioned. Any investments freehold, shares, solids/gold, do have prices prices that go up and down. It will depend on the market, market releases, time to sell, time of selling, and how long you can hold on. I have had good properties that were not flavour of the month and were sold at a loss!
Interest rates on borrowing will and can be a issue, do your loan repayments based on + 3% or more. Take the loan over the longest term on offer. Use. Mortgage off set or redraw loan to reduce loan load and term. Any one sharing the house will be paying rent, or you are buying rental property for capacity to repay loan. This should be subject to any SD, first home buyers support and so on in your state.
Ensure , if you can, and as many people do have appropriate insurances, both in and out of super. Many credit cards have some type of redundancy cover but not income protection (to age 65 check super), it is always to use at least one or two advisers/financial planners, then compare offerings, price, and perhaps use that crappy phone add people. The latter or accountant can check investment tax implication of the project.
With all good comments from xywolap I would add sinking fund of units, town houses, have solicitor read and advise the effect of the body corporate rules, and who and how long have the body corporate members been there?
As thorton82 has said it is hard to pick the why's and therefors of the market. What is happening in Brisbane and nearby cities, large house blocks are being split for battle axe block houses or 5 to 20 floor units. Hence the demanded price is higher than market price. The old rule buy the worse house in best street, always try to to find out why property is being sold or how long. Some times buyers use their own paid indepent agent to find the property. They should not be getting commission on any sale, but are paid by you.
Any how good luck .
Don't buy just because society dictates that you should.
Unfortunately the same society you mention are the same ones buying all of the properties and running up the prices.
I think if you are unsure of what you want you should buy something that can swing both ways - as in you could comfortably live there, but it would also make a reasonable rental. Perhaps buy something that is "livable" but "rentable" as is. Pop a tenant in there for a few years and hopefully ride the capital gain train while you sort your own intentions out. This will give you a feel for the type of expenses that property will incur, while the rent will partially cover many of the outgoings. In a few years you can either sell it off, renovate it and live in it or continue to rent it - depending on your circumstances and feelings for the property / areas etc. I did this with my first property 14 years ago - in the end I never lived there. The property came in very handy when I was able to leverage off the equity in that property to allow me to purchase a home I did actually want to live in but could possibly have never afforded if I didn't have the equity built up in the original property to use as part of the security in lieu of a sizeable deposit.
I am also in my early 30s buying my own home. The prices in inner Melbourne at the moment are ridiculous, I feel I need to get my foot in the market as soon as possible. There seems to be no rhyme or reason why one house sells for more than another, as an example, a nice 2 bedroom bricks house in Windsor sold for $882k two weeks ago. This Saturday, a smaller brick house, not as pretty (Edwardian vs Victorian), with cheaper renovations, 2 streets away, but with planning permission directly behind it for a block of flats that will overlook the property, went for $961k. I know what I want, I want a house in an inner south east suburb, but I also know Im not going to pay too much money. You need to go to auctions and work out how much things are work, I must have seen 60 to 70 houses now, and have a good feel for the market. I can also feel that prices are steadily going up each weekend, so the sooner you buy the better. You will need a big deposit, at least 20% (so 200-300k down in inner Melbourne or Sydney), and you will need to get used to reading section 32s.