Your home is perhaps the biggest investment of your life – particularly as it is not just a financial investment, you are also investing in your future lifestyle. Yet many people have a tendency to “fall in love” with a particular property, and they forget to remain logical in their thinking. As a result, they find themselves owning a property that does not suit their current lifestyle or their future financial plans.
So how do you choose the right property for you?
Find a property that fits your real-life needs, not your dream lifestyle
You might have fantasies of living by the beach or in a small inner-city unit within walking distance of all the pubs and cafes, but how will this choice fit your budget and your long-term lifestyle? Your first home should fall within your budget and it should be compatible with your work and family life. There is no point purchasing a dream property that requires a two-hour commute to work or takes up all your spare money reducing your quality of life.
Is it a good investment for you?
Investigate the economic possibilities of the location and the property itself to see how it will appreciate over time. Also consider how the property will grow alongside your lifestyle choices – perhaps you want to “flip” the investment property by doing a few renovations and selling for a profit, or perhaps you want to live for a few years in a small house before extending the property to make room for a family. Whatever your plans, your property is an investment tool that you can use to provide for your future.
Is the property value accurate?
If you fall in love with a particular property, you may trick yourself into wanting to spend more than necessary just to “win” it. However, it is important to check that you are paying what the property is actually worth. Look at the purchase history of the property and neighbouring properties to see how their value has appreciated, and how much they are all perceived to be worth now. Consider what needs to be done to the property in terms of renovations or repairs in order to make it right for your purposes.
Will you need a home loan?
Before you commit to a property, look carefully into the financial aspect of the deal. Find out how much you will need to borrow in order to secure the property, and whether you can still maintain your quality of life while paying off the loan.