6 reasons you should hold off on buying that next property

Have you ever experienced that situation where you want to get into the property market or add to your portfolio, but the planets just are not aligning?

You may start to feel a bit stressed, because house prices aren’t getting any cheaper and that first or next rung on the property ladder seems to be getting harder and harder to achieve…

Don’t make the leap out of fear, though.

Over the years I’ve learned that there will always be other opportunities in the future.

So let’s look at the many factors that you need to consider first, including some compelling reasons why now may not be the best time to buy.

1.    Finances

Getting onto the property ladder “just so you don’t miss out” could end up becoming your own personal financial disaster.

Before making the leap, you really need to consider the affordability of buying a house.

While the prevailing interest rates and your mortgage repayments are a huge factor; even before that, you need to make sure you have the required deposit and a stable job.

Having a close look at what you can afford and what your financial goals are should come well before you ever set foot in an open house.

It also pays to note than many young Australians are choosing to become renting investors these days.

They continue to rent in an area they like to live in but can’t afford, while buying an investment property that is more financially viable.

Perhaps this could be a solution for your situation?

 2.     Your lifestyle

If you’re looking at buying a home of course it’s a big financial commitment, but many forget that it is also a lifestyle decision.

If there is a change on the horizon such as marriage, a new baby or your job or career is in a state of transition, then buying a property right now might put too much pressure on your family and your finances.

The market may be presenting some great buying opportunities, but you need to ask yourself: “Is this really the best time for me to buy according to my personal situation?”

 3.     Your goals

If your property goals don’t line up with your lifestyle, then you may be heading down the wrong path.

For example, buying a renovator to do up yourself might sound like a great idea after watching The Block, but if you don’t have a spare $100,000 and you’ve never picked up a power tool it could prove to be a disaster.

If you’re considering this type of investment, it’s always a good idea to bring in an experienced builder to get a realistic idea of what sort of work and costs would be involved. If it is out your league, then don’t proceed.

 4.     The market

It pays to do your homework on the property market before rushing into buying a house.

All too often, people get swayed by hype and that’s how you can wind up making poor decisions.

If you’re the smartest person in your team you’re in trouble so consider enlisting the help of a property strategist to get a real feel for what is happening in your target area.

If experts warn that housing prices are getting ahead of themselves, heed their advice and proceed with caution.

Just because it seems like everyone is on a property buying spree, it doesn’t mean it is the right time for you to buy into that particular market.

If the market is hot, it may mean that you have already missed the boat for fair prices and it is better to look elsewhere. Don’t let hype decide your property fate.

 5.     Are you ready for the responsibility?

Owning an investment property brings with it a range of responsibilities, including things like maintenance, insurance and being a landlord.

Maintenance is more than mowing the lawn every other weekend.

It also involves fixing leaky taps (albeit, through your property manager), tactfully working with neighbours and perhaps even getting on to the council about keeping up their end of the streetscaping bargain.

Building insurance is also only the tip of the insurance iceberg.

You will also become acquainted with income protection insurance, landlord’s insurance and mortgage insurance to name a few.

When you choose to invest and rent out your property, you get the added responsibility of becoming a landlord.

That means you get to make all sorts of hard decisions like approving tenants, deciding the rent, requesting a certain standard of care and even evicting tenants who don’t suit.

The responsibility of owning a home can be daunting, and may not be for you at this time in your life.

 6.     Have you done your due diligence?

If you do find a property that seems to fit the bill then a thorough building and pest inspection – along with researching the town plans for the area – is vital.

Doing your due diligence in this respect can safeguard you from a financial disaster.

You can almost guarantee something will come up on the building report, unless the property is brand new, but you should definitely be wary if the recommended repairs are extensive, or if the seller won’t negotiate the price accordingly.

Before signing on the dotted line, be sure to also investigate the future plans for the area you are planning to buy in.

If you are buying an older house and there is a new development planned for the next street then it may significantly affect your resale potential.

Buying a property is a big proposition and if there are red flags coming up in any of these areas, then it may mean that ‘right now’ is not your ideal time to buy.

Bide your time, continue to save for your deposit and keep researching the market, then come back and revisit the idea in six months or so.

Remember, there will always be more opportunities on the horizon and there’s no shame in taking a break, rather than investing when the timing isn’t right for you.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

Sure our property markets are improving, but correct property selection is even more important than ever, as only selected sectors of the market are likely to outperform.

Why not get the independent team of property strategists and buyers’ agents at Metropole to help level the playing field for you?

We help our clients grow, protect and pass on their wealth through a range of services including:

1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now! Click here to learn more
2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.

 

from Property UpdateProperty Update https://propertyupdate.com.au/6-reasons-hold-buying-next-property-george-raptis/