You may experience this if you have kids. Pick up any two kids drawings of their dream homes and you’re bound to notice a few similarities. A house with a triangular top and chimney, a door, one or two windows – and probably a few flattering stick figures.
Flash forward a few decades and your dream home options come with a lot more variety. Townhouse? A detached house? Apartment? Villa houses? Then there’s off the plan vs on. Suddenly those stick figures had things easy.
But the choice should be exciting, not overwhelming – you just need to find the home that’s your right balance of location, style and cost.
On location, location, location.
Location – there’s a reason they say it three times – it’s pretty important. But it doesn’t just mean proximity to the city, it’s also about your lifestyle. How far is work? Are there decent schools in the area? Is public transport reliable? And most importantly – is there a Grill’d or cosey local coffee shop to chill out?
These are factors that could add value to the property, but especially to your life.
What type of home are you looking for?
Don’t know where to start from or have time to take the Buzzfeed quiz? Here’s a quick rundown of the pros and cons of each of the housing types.
Pros: Value for money, located within the inner city, high demand when selling, extra security.
Cons: Less privacy (and possibly thinner walls), limited land, all those stairs.
Pros: Better land investment, outdoor space, flexibility to do what you want, privacy.
Cons: Maintenance expenses, higher costs (and higher bills), less likely to live Friends TV fantasy.
Pros: Lower cost (and lower bills), safety in numbers, upkeep provided by the body corporate.
Cons: Less space, less privacy, body corporate fees, can’t apply for Selling Houses Australia.
Pros: More space, privacy, security and luxury. You can drink sangria by the pool at 3 pm without judgment.
Cons: The price tag, maintenance costs, tend to be further out of the city.
Something old, something new?
Differing properties have differing prices – but there are other factors to consider than what’s under the sold sticker. Maintenance, insurance, services and body corporate fees can all vary too – so keep your eyes peeled on the more hidden costs. It is always good to obtain professional reports from bodies such as CoreLogic or other bespoke agencies as part of your research on the location and other important aspects of the property investment that you about to purchase on.
Buying off the plan or a house and land package means buy now pay later i.e. usually it requires up to 10% upfront payment and the balance is paid at settlement when the land is ready to build – plus you’ll usually get a discounted price with even more reductions on stamp duty particularly if you are a first home buyer. And with a new place, you’re more likely to get better technology (NBN), more modern designs and a better neighbourhood.
Whereas if you buy an existing dwelling, you’ll need to drop a sizeable deposit, with home loan repayments starting straight after.
In saying that, already established house or units are more likely to retain value in a slow market and have less risk than buying off the plan.
Since you’re likely in the early stages of buying, try to not be too bogged down in the scary stuff – do lots of research, figure out what’s important to you and hit up a few local inspections or auctions to get a feel for the process. One great way to start is reaching out to a local independent finance broker for exploring options and seek trusted advice. ASA Mortgage Brokers have access to CoreLogic RP Data reports which will come in handy when you would like to know more about the location, median prices and property lists when purchasing properties.
This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.The original content was initially published on 06 March 2019 online at https://www.mebank.com.au/the-feed/what-type-of-first-home-should-i-buy/?utm_source=shareme6&utm_medium=email&utm_campaign=shareme&utm_content=shareme6_FHB