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Low interest rates, flat property prices and government grants continue to entice plenty of first-time buyers into the home market.

While home is where the heart is, savvy first-time buyers are also using their heads. Here are some of the best ways to make your first move.

AN APARTMENT

It’s generally accepted that, on average, units achieve lower capital growth than houses over the long haul. However, that average tends to over-simplify things and ignore the many lifestyle benefits that can come with a unit in a handy location.

Units generally allow first-time buyers into areas they couldn’t afford if they were buying a house. The lower capital return is often a trade-off.

The right unit, though, can still provide capital growth over time and a solid leg-up to something bigger or better, while owners get the benefit of convenience and low maintenance in the meantime.

What to look for:

– Within 15km of the CBD.
– Walking distance to public transport, cafes and restaurants.
– I-nternal laundry.
– Lock-up garage.
– A complex with a high percentage of other owner occupiers.
– Affordable body corporate fees.
– City views.
– Built-in wardrobes and other storage.

What to avoid:

– Too many stairs.
– Areas with a glut of new apartments for sale.
– Over-capitalising on any make-over.
– High body corporate fees.
– Something to consider:

If you decide to trade up to something bigger, you may find your unit becomes an ideal starter for an investment portfolio.

THE FIXER-UPPER

If you’re set on a certain area but find yourself short on the sale price, consider an older house in need of renovation. With property prices flattening, the opportunities for a quick profit with a lick-and-flick have dwindled. But for first-home owners looking to settle for five or more years, a renovator’s delight could still have plenty of upside.

Fixer-uppers generally appeal to buyers who plan to do most or some of the work themselves. If you’re not handy or don’t have time to work on the property, steer clear.

A professional building inspection is a must for all properties, but the devil is always in the detail when it comes to older homes. Read the inspection report thoroughly and seek more information and repair quotes if any issues are highlighted.

What to look for:

– Houses that only need cosmetic work such as a new kitchen, bathroom, paint, floor coverings and landscaping.
– Sound electrical and plumbing.
– A high aspect (views always add value).
– Signs of other renovations in the neighbourhood.
– Excellent local infrastructure, such as public transport, or plans for improvements.
– Good property drainage.

What to avoid:

– Asbestos (unless it is a bargaining chip and can be removed easily by an expert).
– Structural deterioration.
– Damp.
– Properties prone to flood.
– Something to consider:

Look in post-war suburbs with ageing populations, especially if they are near other areas that have already undergone urban renewal.

HOUSE AND LAND PACKAGE

Your first home doesn’t have to be your dream home, but a house and land package could get you close.

If you are prepared to be further from the city, the house and land bundle is worth considering. You not only get all the conveniences of a new home, often built to your design, but better energy efficiency than an older home due to new regulations and improved green technology. You may also be able to take advantage of government incentives for new homes, on top of regular first-home buyer grants.

The trade-off for all of this is usually distance. If you work in the city, a long commute to the office may soon take the gloss off your new home and neighbourhood. On the other hand, affordable, new developments are opening up in smaller cities, such as Brisbane and Perth, which are not as far flung as the new home and land packages in Sydney.

The biggest challenge with new neighbourhoods is infrastructure, especially transport. Talk to the local council about what is planned for the area and when.

What to look for:

– Infrastructure to support a new suburb, including shops, public transport and schools.
– A reputable builder who has built other homes in the area, not another state.
– Land that will help set your home apart – a high aspect, city or bush views.
– An easy-to-read contract that spells out all inclusions, progress payments, completion date, allowable delays and treatment of unforeseen conditions.
– Good drainage.

What to avoid:

– Flood-prone land – reclaimed industrial sites and land near golf courses and parks are often on flood plains.

BUDDY UP

Many singles are now finding two heads and wallets are better than one when it comes to their first home. Siblings and friends are buddying up to get a better quality first home than they would solo. Finding the right partner is key, with trust and reliability critical. Contracts now accommodate tenants-in-common with equal and unequal shares in a property.

As your local Mortgage Broker, I can then help you structure a loan that reflects each owner’s share and repayments.

Talk to your local mortgage broker

Your house hunt should start with a visit from a local Mortgage Broker. Brokers work for you, not the lender. Their aim is to find the best home loan for your situation, saving you money over the life of the loan. They can also manage the entire loan process and organise pre-approval so you can start your property search with confidence.

“That’s the theory, but the reality is home buyers are on the hunt all year round for the right property at the right price.

The economic cycle and how you present your property will have a far greater impact than the weather on how soon it sells and how much it fetches.

While you can’t control the economy (or the weather), there are a number of things you can do to improve your chances of buyers vying for your property over another. Here are Haven’s top tips to help you get top dollar for your home.

MAKE SURE THE PRICE IS RIGHT

You can ask whatever price you like, but whether anyone is prepared to pay it is another matter. One of the biggest mistakes vendors make is believing their home is better than anyone else’s. It’s time to put your emotions in check and focus on the facts.

Research the sales prices of similar properties in your area and price within that band. If you would like more than the market can offer, you may need to consider selling in a more bullish market.

One of the best tests of whether your property is priced right is to see how many inspections and genuine inquiries it attracts in the first 30 days. If interest is scant, then chances are your asking price is too high.

As much as vendors and buyers alike believe the selling agent is working against them, the agent is actually the expert who lives and dies by the market. Listen to their feedback and consider lowering your expectations, along with the price, if needed.

FIRST IMPRESSIONS COUNT

Presentation is everything when it comes to getting the best price for your home. It counts when buyers are scanning the real estate section and online listings, and it counts when interested parties rock up for a walk-through. The aim is to make sure the photos match what they see in person.

Some absolute essentials:

– Fix anything broken.
– Clean all surfaces, including walls, until they gleam.
– Clear away clutter.
– Remove signs of pets.
– Get rid of any odours and stains.
– Tidy lawns and gardens and prune or pull out any plants that are over-grown.
– If your home has a tired-looking façade, give it a good clean with a water jet and consider if anything needs to be patched, painted or replaced. A few thousand spent on a face-lift will help your house stand out from the pack and could help you pocket an extra $10,000 to $20,000 from the sale.

CREATE SPACE

Buyers want to envision themselves in your home so clear clutter to make room for their ideas. Minimise furniture to create the illusion of space, remove knick-knacks, appliances and paper from surfaces and clean out cupboards (yes, people look in them) so they are only half full.

You may need to put your surplus items in storage but the inconvenience will be worth it.

Some sellers are going so far as to shift their existing furniture out and move rented furniture in. Known as staging, this increasingly popular trend aims to transform your home — with the help of a stylist — into something you would see in an interior magazine.

Generally sought by vendors at the upper end of the market, staging can cost anywhere from $2,000 to $20,000 or more, depending on the type and quantity of furniture rented and how long it’s required.

Those with more modest budgets and abodes might still consider spending a few hundred dollars on a stylist who can recommend how to arrange a room for extra wow.

LET THERE BE LIGHT

Enhance the feeling of space further with light. Open blinds and curtains to brighten rooms or, if the window coverings are heavy, consider taking them down altogether. Just make sure your windows are sparkling!

You should also consider the aspect of your home and time of year when setting inspection times. West-facing homes in summer, for example, should be showcased in the morning or early evening rather than in the afternoon when the hot sun is beating on westerly windows.

If having a twilight or evening viewing, use light to create the right ambience. Make sure the front entrance is lit, but not glaring, and consider softening the lighting inside with lower wattage globes or well-placed lamps.

HAVE YOUR PAPERWORK IN ORDER

Show your readiness to sell by having a survey of your property and a building and pest report on hand for prospective buyers. It not only saves them time and money but shows you have nothing to hide.

A building and pest report will also tell you if any repairs are required before you go to market. Most vendors leave it up to the buyers to get the building and pest inspection done. The problem is if the inspection reveals any issues, the buyers then have a bargaining chip to drive down the price.

Better for you to manage the cost of repairs beforehand and leave less room for negotiations.

SOMETHING FOR SEEMINGLY NOTHING

Consider including something extra in the sale. If your outdoor entertainment area wows visitors, include your barbecue or outdoor furniture in the contract. We’re not suggesting you give them away — rather they are built into the asking price.

Other inclusions might be a water or garden feature, furniture that suits the style of house, home theatre equipment or a fridge that fits a certain-sized space. It might be the deal closer and means you have one less item to move.”

Click here to download my “Top 12 Tips to Paying Your Off Home Loan Sooner”.

https://www.mortgageaustralia.com.au/email/files/top12tips.pdf

When our home or car insurance comes up for renewal each year, most of us (hopefully) invest the time to shop around and investigate the competition to make sure we are getting a good deal.

The average Australian with a mortgage spends 18% of their gross income on housing costs. With such a large investment, why do we not give our home loan the same regular review?

With the recent change that Mortgage Stamp Duty is no longer charged on refinancing your home, it is a lot cheaper and easier than many people think to switch loans.

For more details, read my “Change can be good” article: https://www.mortgageaustralia.com.au/email/files/changecanbegood.pdf

In our stable economy, there are plenty of opportunities for young people to get a part-time job. Kids need to be 14 before they can get a proper paying job and they need a tax file number (TFN).

High-schoolers can skip the usual paperwork by applying for a TFN through the secondary schools program, which allows schools to verify a student?s identity through their records. If your school doesn?t participate in the program or you attend university, apply for a TFN online at www.ato.gov.au

One of the hardest parts about looking for a first job is pulling together a resume when you don?t have any actual work experience. Most kids won?t know where to start, so get them to think about their skills, hobbies, school and sport achievements to help promote qualities such as organisation, determination and teamwork.

There are plenty of employers with part-time jobs for students – fast food chains, cafes, supermarkets and retailers among them. Start by looking close to home, especially if your student is yet to get a driver?s licence. Surprisingly, even in our digital age, going door-to-door is still often the best way to source casual or part-time opportunities.

Apart from giving young people some spending money, a part-time job will help them become more organised, disciplined and independent, qualities that will hold them in good stead when it comes to working fulltime.

Unfortunately, casual work can sometimes prove demanding and unreliable, with employers cancelling or adding shifts, or asking kids to work hours that don?t suit study or family schedules.

If your student has a fair and flexible employer, encourage them to show their appreciation by working hard and maintaining a positive attitude.

Most importantly, kids learn the value of money and how to manage it. Help them prioritise their spending by giving them some financial responsibility, such as paying their mobile phone bill or covering their petrol. That way they learn to be disciplined with their pay and appreciate early the value of disposable income. If they run out of money before their next pay, they will soon learn the importance of sticking to a budget.

You should also encourage your student to save a portion of their earnings for some of life?s bigger expenses, such as a car, travel or even a deposit on their first property. It?s never too early to start building a nest egg, especially while kids have the benefit of living at home. If they manage to get a couple of thousand dollars under their belt, it?s worth considering a high-interest savings account to help propel their funds further.

A part-time job while still at school also means getting a jump on superannuation. While most young people barely contemplate tomorrow, let alone retirement, the forced savings of Australia?s super scheme means many of today?s teens may not have to rely on the pension in their senior years.

Parents are often pleasantly surprised to find part-time work helps their kids mature, making them more respectful and responsible on the home front. If you are looking to give your young person a leg up in life, encourage them to climb out from under the covers these holidays to look for a part-time job.

Do you start to get a headache when you think about everything involved in getting a home loan?

Don’t despair. Many other borrowers have felt the same way in the past.

It can seem a little overwhelming at first, but really, there are 9 simple steps that will carry you from tenant to proud home owner with minimal fuss.

1. Preparation

The first step is to get all of your ducks in a row, ready for your meeting with a mortgage broker. Make a list of all of your assets and your liabilities, taking into account your living expenses, loan repayments and student debts etc.

Spend some time looking at the different loans available, so that you can be ready to ask plenty of questions when you meet your mortgage broker.

2. First Meeting

Your mortgage broker will have his/her own way of doing things, but usually will give you a run-down of their panel of different lenders, what fees and commissions they charge, and the information they need from you.

The next step will be a discussion around your financial position, how much you need to borrow and what sort of loan products might be best for you. Your mortgage broker will then collect all of the relevant information needed to complete your application.

3. Application

Your mortgage broker will review your application and make sure that all of the details are accurate and complete. They will provide some information to the lender about your ability to service the loan and then they will submit the application on your behalf.

4. Pre-approval

If all goes well between your mortgage broker and your chosen lender, the next step is Pre-approval, or Conditional Approval. This allows to you start looking for a property, because the lender has advised you that you’re likely to be approved, and the approval amount. There will be some conditions attached, and nothing is guaranteed.

5. Valuation

The lender will investigate the value of the property you choose to make sure the market value is similar to your purchase price, and also to ensure that they are happy with the property itself.

6. Unconditional Approval

Once you meet all of the conditions that the lender sets out, you will receive unconditional approval.

7. Letter of Offer

Your letter of offer makes it all official, and it’s important to make sure you understand all of the conditions, fees and details contained within the document. It’s a good idea to ask your solicitor or conveyancer to help at this stage if you’re unsure.

8. Mortgage Documents

The mortgage documents will usually arrive with your letter of offer, and they outline the contract between you – the borrower, the lender and the State Revenue Office. This should be carefully reviewed by your solicitor or conveyancer.

9. Settlement

The settlement date is the big one – when the money actually changes hands, all of the different costs are settled and you can then take possession of the property.

This step should be handled by your solicitor or conveyancer in conjunction with the legal representatives of each party involved.

If everything goes according to plan – this is the part where you pick up the keys, grab a bottle of bubbly and start celebrating. Congratulations – you’re now a property owner!

If you have a successful businessand profitable and can’t understand why your bank won’t support you, click here to find the answer, and the solution.

https://www.mortgageaustralia.com.au/email/files/thebalancingact.pdf

Are you nearly ready to upgrade your home?

It’s often a natural progression – we come to a point where the house is just too small to fit everyone comfortably. Maybe it’s got to the stage where you really need a home office.

When you decide to make the move, one of the biggest questions will be – ‘should I sell my home before I purchase the next property, or buy first and sell later?’

Selling first…

One of the biggest benefits of selling you home first, is that you won’t commit to a new home until you know how much your old home has sold for. It’s difficult to shop for a property without knowing what your budget is, so this method is safest if you want to avoid getting yourself in some hot water financially.

It’s easier to get finance when you sell first, because you will ideally have some equity from your original home ready to contribute to the purchase of your next home.

If you sell your home first, you won’t be trying to cover the cost of two loans if your home doesn’t sell as quickly as you thought it would. You could also request a long settlement period when you sell, to give yourself time to search for a new property.

One the flipside though, if you aren’t able to get a buyer to agree to a long settlement, you might be forced to rent while looking for a new home. This means moving twice, unpacking and repacking, and going through all of the fuss of sorting out utilities, internet and other services.

If it takes a long time to find another home, there could be upward movement in the property market, leaving you with less purchasing power to buy the type of home you want.

Buying first…

If you’re financially able, buying first can be a lot more convenient. There’s no need to rent between homes. You might even be able to move into the new home before you sell the other, making it a lot easier to keep your original property looking nice for inspections.

Many people find their dream home before they sell. If you have already stumbled on ‘the one’ it probably won’t be on the market by the time you sell and settle on your home.

However if you take out bridging finance, you will be paying a loan on both homes until your old home is sold. So depending on your financial capabilities, this could be a risky decision.

It might take a lot longer to sell your home than what you estimated. Sometimes there is no good reason why some properties sell almost immediately and others take quite some time to move.

You might feel pressured to sell quickly if you already bought, and you could end up accepting a lower price in order to get it over and done with.

Renting your home – the other option

This one is definitely a conversation to have with your accountant, but if you can afford it – the other option is to keep your existing property and rent it out.

This could get you on the fast track to creating wealth through property investment – just make sure you get the right tax advice and check that you can cover all of your costs.

It’s particularly important to budget for times when you might be in-between tenants for a few weeks or more. Could you cover both loans while there is no rent coming in.