For most people, finding that ‘just right’ property is the fun part of the process, but like every other step, it can be tricky without some guidance.
1. How to research the market
A great way to do some research is to go to open houses in the areas you’d like to move to.
With a pre-approval in hand or a good idea of what you can afford, find out what prices these properties are selling for – rather than the asking prices – to give yourself a good picture of where you can afford.
Keep an eye on new listings so you can inspect any that stand out as soon as possible. Contact local agents to discuss listings in your price range and to let them know you’re in the market.
Attend auctions to get a feel for what properties are selling for and familiarise yourself with the auction process.
2. What suburb should you buy in?
First and foremost, the suburb you choose to buy in has to be in your price bracket.
Be prepared to list your must-haves and areas you’re prepared to compromise on before you go looking, to make the process a little easier.
For some first home buyers, proximity to schools and family-friendly facilities are a must, while for others, it might be quick access to great cafes and restaurants or open spaces and recreational facilities.
Take some time to drive around the suburb you’re interested in to get a good feel for it. Sit in a café or restaurant or go down its main shopping street.
Future infrastructure projects such as major road upgrades or new community facilities could also be major influencing factors.
Don’t forget to also factor in future resale value if you think you may not be in the house forever. A good rule of thumb for new buyers is that an average house in a great neighbourhood will usually trump a great house in an average neighbourhood.
3. What type of property should you buy?
New/off the plan
Buying a new or off the plan property means you’ll be putting a deposit down on something that is yet to be built.
The advantages are you’ll have more time to save, as you’ll not be liable for the rest of the cost until the building is completed. It also means you’re moving into a brand new home, rather than an older home that may need some work.
The risks come in the fact you’re buying a property that still doesn’t exist, meaning there may be construction delays, or the construction quality might not be up to the standard you expected. Your property may also fall in value before you even move in.
House and land package
House and land packages are generally an affordable first home buyer option. Packages can offer either a completed home the buyer moves straight into or a land purchase where the buyer can choose from a set range of builders and designs to construct their new home.
A drawback to these packages are that they’re usually in outer, new suburbs that may be a long way from the facilities some people are looking for. And if you’re buying before the home is built, there may be issues with the build quality later on. House and land packages also tend to involve relatively small land plots.
Apartment/unit
Choosing an apartment or unit can offer a cheaper way of getting close to the city without the prohibitive costs of some standalone homes in the same area.
If you’re considering an apartment, remember to investigate the common ownership – or strata – fees involved with buying into a complex.
Also try to establish how many units are short-stay or holiday places, how much car parking space is available, how much storage space is available and who the other tenants of the building are.
A young, active crowd may not suit a quieter older couple. And while new apartments may provide a fresher build quality, older apartments can be more spacious and offer more amenities.
Established property
Usually older, established properties are more often on larger blocks than more recently built properties and can sometimes feature well established gardens and other features.
If needing some work, and you’re prepared to do it, buying a ‘fixer-upper’ could give you a foothold in a desirable neighbourhood. The risks involved with older properties can be hidden problems that inspections may not reveal and that you’ll have to cover as time goes on.
Buying an established property also means in most cases, you won’t be eligible for first home owner grants. Although other state duty concessions and exemptions may still apply if you’re buying for the first time.
4. Buying to renovate
For those prepared to put in the work, buying the ‘ugly duckling’ property may be the most rewarding way to enter the housing market.
There are a few things to remember though.
- Avoid properties that need major structural work, as this can be very costly.
- Check the planning guidelines for the area. Some potential changes may not be allowed under council by-laws.
- Set a realistic renovation budget. Will the house still be worth it if you have to spend a tonne of money just to make it liveable? Will you still be able to make loan repayments while financing the refurbishment?
- Think about resale value. Check the local market conditions for a renovated property.