If you are ready to purchase your first home consider these 10 hot tips!
While the thought of living in your first home is a tempting one, there is a financial incentive to making your first house an investment property.
In doing so, all costs become a tax deduction and therefore up to 40% cheaper than your own home.
This strategy allows you to live in the location you want, while still providing the opportunity to enter the property market.
2. Share of a house
Instead of owning a whole house in a bad area because of affordability or serviceability issues, investigate the opportunity to combine your resources with a trusted investment partner.
Pooling resources with a friend, sibling, or fellow investor/s mans the opportunity to take a half or quarter of a better capital growth prospect.
Don’t try and run before you walk; investing should mean an ever-increasing amount of equity that allows more opportunities as it grows.
A unique and boutique apartment can be a great capital growth vehicle – look for a good view, a ground floor, or a nearby café precinct.
4. Couple up
Do not delay living with your partner once you know that it is serious – be bold and move in together.
Single living expenses can be outrageous; a double income and shared costs reap financial benefits when it comes to investing in property.
5. Pinch some equity
Consider any opportunities to obtain equity without refinancing.
Can family or an associate help you?
It does not have to be a loan, rather a chance for both parties to make capital gains off the property.
For example, if they lend you 20% of purchase price, when you can return it you give them 20% at the current value and, if everything goes to plan, it should be a win-win proposition for all.
6. Do not fall for a grant
Most grants and first home buyer schemes are traps.
When the government is offering $20k to first home buyers, it is on the proviso they buy brand new properties – you will gain $20k, only to lose an equivalent $50k on that purchase.
7. Think long term
If you do not want to own the property in 20 years, do not buy it – walk away.
If you need your money back in 0–5 years, do not buy property.
The entry and exit costs are far too steep; the mistakes too costly.
8. Get advice – do not fall prey
Some agents prey on first home buyers by drawing them in with sharp marketing and then negotiating with an eager, naïve customer who is anxious to get on the property ladder.
Before long they may have paid too much, bought on a main road, or even purchased a property sight unseen.
This consistently ends in the first home buyer regret, and them wishing they had never wanted to buy a property in the first instance.
9. Fear of missing out
Fear of missing out cause a lot of investor mistakes.
The pressure of auctions, being fed up with looking, or following what others are doing can all lead to disaster.
Getting carried away, or being too over-exuberant with negotiating a property deal can lead to mistakes that are expensive and can take years to unwind.
Property cycles will come and go, but it is far better to time your life and do what is important to you and your life goals.
10. Invest in yourself
By far, the biggest investment you can make is in yourself; nothing pays like specialist knowledge.
Spend 30–45 minutes every day increasing your knowledge, attend seminars and listen to podcasts until you are at the top of your game.
This will help you into that first home even sooner and set you up for investment success.