4 years ago I worked up the courage to buy my first property.
My friends and I spent months looking for the right property, submitting offers and having them rejected.
When the right property came up we jumped at the chance and submitted our offer. Two weeks later we owned a two-bedroom unit on the south side of Sydney, in a suburb called Miranda.
The unit was nothing special, in fact it was the opposite of special.
Saying this it did have distant city and water views and it seemed cheaper than everything else on the market in the area at the time. The other benefit of this property was that it was within 10km of the homes we grew up in giving us a sense of security.
4 years on and having just sold this unit for a $70,000 profit its easy to see things clearer.
This story is important because this experience is similar to the way that 95% of first homebuyers get into the property market.
- Buy in an area we feel comfortable with
- Don’t think we can negotiate on price
- Buy with a friend or family member
- Buy cheap
- Rush into the market
- Listen to the advice of our family and friends
- Get emotionally involved
- Buy without a plan
If I could sit down with my past self, knowing what I know now, I would walk through some of the following tips for first homebuyers I’ve picked up over the last 4 years:
Go and talk to a number of property investors.
- Learn from their experience, their successes and failures.
Buy your first investment property on your own.
- I know it can be expensive to get into the property market and it can feel safer to buy with our family and friends.
- This said the longer-term benefits of increased serviceability, capital gains and control far outweigh the 6 -12 months it will take you to save the extra deposit.
Build a team of advisors.
- This team should include a solicitor, accountant, mortgage broker and a couple of real estate agents.
- These advisors should be property investors themselves and should be willing to help you navigate your way into the property market.
Buying cheap doesn’t always mean your buying well.
- It’s far more important to buy a quality property that’s in line with your property investment strategy than to pick the eyes out of the market.
- To many of us get caught up with buying the cheapest property we can find and miss the properties with the potential to add serious value.
Develop a property investment strategy.
- This will be the hardest lesson you’ll have to learn.
- Just like exercise, you can achieve results by simply showing up, but you will achieve them far quicker if you develop a plan, work out with a trainer and have a group of people around you to keep you accountable.
- It’s worth taking some time to look at your options and goals before buying your first property. This way you’ll be able to set strict criteria around the properties you buy and know your setting yourself up for the future you desire.
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