Many first time buyers enter the market with their dream home set firmly in their sights. However, that particular goal is often not achievable – at least, not the first time around – and therefore some tweaks to the buying strategy may be needed. Done properly, this could mean the buyer’s dream home is within reach sooner than previously expected.
- One of the biggest mistakes a first home buyer can make is to get so caught up in the euphoria of buying a dream property that they exceed their budgetary limits. Just because your lender offers you major borrowing power doesn’t mean you should necessarily jump at the chance. Before fully committing to a loan, make sure you weigh up whether your current budget can handle the proposed repayments.
- To enter the market even sooner, consider adjusting your buying expectations and cutting back on a few luxuries. Making budgetary adjustments now will only benefit you in your property buying future.
- A well-informed borrower is more likely to make well-informed decisions regarding property investing. Talking to your parents and industry experts can provide you with the knowledge and strategies that will get you into the market more quickly.
They may suggest approaches such as getting another party involved in your purchase. While you may not have envisioned your first property purchase including someone else, this may be best for your financial situation at the time.
- Joining financial forces with someone else means you will not need to bear the financial responsibility of property ownership alone. It will also allow you to increase your buying capacity, meet lending criteria more easily and lessen your long-term financial burden.
- Focus your buying strategy on location rather than on the aesthetics of a property. A property may look good, but this means nothing if the location has no potential. Aim to buy with capital growth in mind and steer clear of areas that could devalue. Access to public transport, shops and schools will add value to a property, so watch out for these features too.
Your first home may not be your dream home, but adopting the right strategy at the beginning could propel you towards it sooner than you had thought.