Investing in property is no small fry. Not only is it costly, but it’s stressful, emotional, and a serious long-term decision. Even if you’ve seen the home of your dreams or the perfect investment property, and you think it’s within your price-range, the questions shouldn’t stop there.
What are your reasons?
Some people buy their first property because they’re getting ready to start a family and like the security of owning their first home. Others find that they’ve come into money and want to invest in their own future. And others think that the property market is their calling in life, and buying property for rental should make up part of their career paths. While these are all valid reasons to invest in property, they’re each more appropriate at different points in someone’s life, and require different levels of initial security or down payments. It’s often recommended that your first property is a small building that you can make your own, so even if you are looking into a career in the property game, you have the security of owning your own home outright. Whatever your reason, it isn’t going to be stand-alone reason enough to go ahead. Your financial situation and future plans have to play a role in your decision.
How does your cash look?
Most people don’t have the luxury available to them to buy their first property outright, and rely on down payments supplemented by a homeowner loan to get them through. This means that if your credit report isn’t looking so sweet, you could struggle. There are books that provide the best credit repair advice available on the market, so you could, over the coming months or years, help to level that playing field. It’s also essential to work out your budget for buying your home by understanding how much you can spend on monthly repayments. It could be a costly mistake to overestimate on this, so make sure you buy for what you have available now, not what you expect to be able to afford in the future. Many people choose lower repayments on their first home than they currently pay on rent. This is because additional fees such as homeowners association rates, insurance, and property tax can add a substantial amount to your monthly outgoings.
What does your future hold?
Buying a house is for life, not just for Christmas. Well, it’s at least for the foreseeable future, so if you’re planning a world tour, or a move to the other side of the country to follow your job or to join the circus, you could find that buying your first property now becomes a hinderance that you’ll regret. It’s a decision which should involve not just your current situation, but also where you anticipate you will be in five or ten years time.
Investing in your first property requires more than just cash and a great credit score. It requires long-term plans and a solid understanding of your budget, and it certainly isn’t a decision to be taken lightly.