As the saying goes, ‘What goes up, generally comes down.” Given we’ve seen record growth in property prices over the last few years, it’s not inconceivable that we may see a flattening (or evening out) of property prices over the coming year.
1. Start your research now
What are you looking for in a property? If it’s a home to live in, where do you want to live? What features are you looking for? What’s your list of non-negotiables? Being able to answer these questions should form part of your property research.
If you’re looking for investment properties, what type of property are you looking for (single title vs strata)? Are you looking for high rental returns, or prefer to aim for high capital growth? Are you looking to buy in your home state or exploring interstate options?
Once you have some clarity on what you’re actually looking for, the next step is to spend some time on real estate sites. That way, you can get an idea of how much you’ll likely need to spend to secure the type of property you’re after. And from there, you can investigate what is and isn’t possible.
2. Reduce unnecessary expenses
When lodging an application for finance, your monthly living expenses will be closely scrutinised. Lenders want to see whether you’re a spender or a saver and will consider your living expenditure when assessing your capacity to service a loan.
So, now is a good time to go through your expenses to see if there’s any areas you can cut back. Excessive streaming services, lots of takeaway meals, unused memberships and/or subscriptions can all add up.
We’re not suggesting you become a full-on minimalist here or stop having your morning coffee. We just want you to be aware of what a lender will look for when you’re applying for a loan, so you can be prepared and give yourself the best chance of being approved quickly.
3. Build up your savings
Once you know what type of property you want to buy – and what price range you’re looking at – you might find it a little easier to save. Often it’s hard to save, just for the sake of saving.
A 20% deposit is regarded a good goal to aim for, but there are certainly ways you can buy property and get into the market with less than this amount. (If you already have equity in an existing property, you may not need to contribute any cash at all towards your next purchase.)
So, if you don’t quite have the elusive 20% saved, that’s ok. We can still help!
4. Find out your borrowing capacity (and obtain pre-approval)
Understanding your borrowing capacity is an important step to determine what type of property purchase is achievable for you. After all, you won’t know what type of property you can afford if you don’t know how much you can borrow!
Some home buyers we speak to, have only started to think about wanting to purchase property. These clients come to us wanting to know how much they need to save, before ramping up their savings efforts.
Other home buyers we speak to are ready to go and keen to lodge a pre-approval right away.
Whatever stage of the home buying process you’re currently at, we can help!
