When you’re buying your first home, you’re taking your first step on the property ladder which can set up your wealth for life. It makes sense, therefore, to think strategically to maximise the value of your investment.
As a first home buyer, you should begin with the end in mind – that is, consider your financial goals and how owning property will contribute to your wealth.
Your first property purchase will have far greater significance than simply allowing you to escape the rent trap, or finally stop living with your parents.
But don’t buy on emotion. Instead, create and apply your financial plan to your first property investment. A successful first purchase can substantially add to your lifetime’s wealth.
For example, more than 60 per cent of Australian who own their property outright have seen their home double in value, even through the dips, downturns and booms that inevitably come with all investing.
Research and advice are essential in making the right decision. As your agent, we’d be happy to provide with you some insights on local areas that are high growth. Independent data sources can also help you understand which to invest and the type of property, such as a unit, house or even townhouses that are in demand.
An area that struggles to deliver growth in value is unlikely to deliver the financial return to meet the goals of your financial plan. Purchasing the right style of property is just as important, especially if you don’t intend to live in it. Investigate the local market to see what is hot in the rental market.
Remember, if you view your decision as an investor, then you don’t have to like the property – it’s not going to be your forever home.
Another important factor for first home buyers is to maximise the available financial instruments, such as the First Home Buyer’s Grant and the various stamp duty concessions provided by the government to stimulate the market.
Ask your financial adviser or mortgage broker about Lender Mortgage Insurance. This is a tool that may ease the requirement for a large deposit and, therefore, assist you in making your first purchase faster than you thought possible.
Key considerations:
- Think strategically – how will this purchase help you meet your financial goals
- Seek out high growth areas – these will provide the best financial results for you
- Research the style of property that is in highest demand in your chosen area
- Leverage all financial instruments to accelerate your entry into the market
- Ensure you stay within budget; and
- Let your head not your heart do the thinking