Buying a property is a process that’s brimming with excitement. Because of this, it’s easy to fall hopelessly in love with the first property you see. You start to believe that it’s perfect for your home, business, or for investment, causing you to rush your decisions.
Why some people do this is a bit of a mystery. Some may be so keen to expand their portfolio right away that they ignore features in the house that they wouldn’t otherwise choose. Others are so blown over by the idea of being a new homeowner or acquiring another asset that anything that looks good on the surface will do. And, in a small number of cases, there’s a desire to simply get the buying process over and done with.
We’re here to explain why you shouldn’t buy the first property you see unless you’ve already seen at least a few others. Once we’re done, you’ll understand why weighing up your options is crucial.
There are Other Properties Out There
Take a step back to consider the number of properties that are available right now. With that in mind, is it realistic that the first one you lay eyes on is the best one for you?
When you take the time to explore other properties within your budget, you’re increasing your chances of finding one that has more of the features you’ll love. You may find a property that has more space, a larger garden, located within a growth area, or offers a faster commute. What’s even better is that 2019 is turning out to be an excellent time for shopping around, especially for residential properties, in terms of pricing. Dwelling values in Melbourne fell by 4.1% in the first quarter, while in Perth and Sydney they fell by 3.5% and 4.1%, respectively. This means now is potentially a great time to grab a bargain.
Excitement May Cause You to Miss Flaws
In the midst of all the excitement, you may miss flaws that will make your dream home a nightmare to live in. For example, although living close to a major nightlife hub seems enticing right now, will it feel that way when you, your tenants, or house guests need a good night’s rest?
To avoid missing flaws, it’s wise to visit several properties and work with your property manager or real estate agent to appraise the perks and pitfalls of living in each one. Although this is a good way to identify hidden flaws, be wary of becoming overly critical. There’s a slight risk you’ll start aiming for unattainable perfection, which will slow your search down.
You May Miss Out on the Value of Other Neighbourhoods
Whether you’re purchasing a residential or commercial property, it’s likely that you have your ideal neighbourhood or area in mind. Sometimes this is for practical reasons such as better commuting times and nearby foot traffic. When the first property you see in a neighbourhood ticks all the right boxes, you may rush in to buy it.
In this scenario, you may fail to investigate the value of other areas. For example, while one area may add 15 minutes onto your commuting time, it could allow you to buy a bigger house that’s perfect for those planning to have more children or want more tenants. Or, if you’re a business owner, investigating other areas could help you capture a new market that’s easy to gain a higher share of or lower your overheads.
You May Increase Your Risk of Overspending
A mortgage is possibly the biggest financial commitment you’ll ever make. When you see a property that you like, there’s always a risk that you’ll miss out on it because another buyer gets there first. But if you rush in to avoid this scenario, you may end up committing yourself to a long-term financial burden you can’t actually handle.
When planning to take out a mortgage, you need to consider a number of things such as your budget, current financial situation, and even market trends and how they’ll affect your finances in the future. For example, in 1974, home loan variable rates went over 10%. If that were to happen in the next few years, could you handle the pressure? Don’t let the sense of urgency that comes with buying a seemingly perfect first property land you in hot financial water. It pays to be patient and do a bit of research first to get the property that fits your goals not just aesthetically but also financially.
Come Up with a List (and Check it Twice)
When it comes to your property search strategy, it’s important to be clear about your goals and what you want your target property to be like. You can start with making a list of all the things or characteristics that the property must and must not have in accordance to your goals. For example, if you want to cater to tenants who regularly travel to the CBD for work or business, then a property that’s just a stone’s throw away from public transportation terminals is good. On the other hand, if you’re buying a house with the possibility of raising a family in it, then having ample space and a location that’s away from crime hotspots are things you should consider.
Then, create a secondary list of things you’d like and not like. Unlike in the first list, these items are negotiables (e.g. you want a sauna but not really a spa) which can make a property more attractive but are usually not the basis of your purchase decision. Also, deciding which types of renovations are acceptable to you can make choosing a property easier. For example, you’re willing to accept repainting and re-carpeting but not replacing the kitchen fixtures or the pipelines.
In making a financial decision, may it be buying a new house or getting a loan, seeking expert advice will go a long way. At Clever Finance Solutions, we’re in the business of helping you make the right financial choices. We have the expertise, experience, and network to help you not only secure the best loan for your needs but also assist you in your property journey. To learn more about what we can do, we encourage you to arrange a no-obligation appointment with us here.