Whether or not you should buy a house now or hold it off later depends on whether you are buying it as an investment or a place to live says finance strategist and mortgage expert Jeri O' Brien.
“Are you buying the house as an investment or a house to live for your family? Usually, if you want to live in the house, you either want it near-certain amenities, school or workplace. However, if it’s for the purpose of investment, you will only look at the numbers and profits, you will remove the emotional aspect of the property.”
Mr O'Brien says although some experts predict that Australia's property market will drop toward the end of 2019, the argument whether or not to buy should not rely on the temperamental property market but whether potential home buyers are ready to take the risk since owning a home is a big commitment.
"Although there are experts who say that the property market will drop towards the end of 2019, we can't assure it. I think it would always come down base on the research of every individual to a certain level. We should ask ourselves, are we ready to take the risk? Then let's go and buy a property. These are the aspects we should know."
Deciding whether to buy a home is a major decision. To help prospective buyers in their quest, Mr O' Brien shares some tips home buyers need to do before securing a house deal.
What you need to do before buying a house
1. Always start with the end in mind
Home-buying can be challenging, but it comes much easier if you have a plan and a clear path forward. Mr O' Brien says think long-term.
"This is where long-term goals come in. Do you plan to retire in 10 or 20 years? This can be a basis of where you are either aggressive in buying or you want to take it slow. You should first determine the end, do I want to work 2 days a week since I already have a supplemental income? These are the factors you can consider so always think long term when buying a property. Properties are long term as compared to the stock market which you can sell in 1 or 2 weeks' time."
2. Incorporate your personal plans with your investing plans
"Once you've determined your end in mind, incorporate all your personal plans with your investing plans by incorporating your personal budget to your investment budget," says Mr O' Brien.
Home-buying can be challenging, but it comes much easier if you have a plan and a clear path forward. Source: Getty Images
3. Know your budget
You need to take a long, hard look at your finances and yourself, and determine what you are planning in the years and how much you can afford to repay.
Know your expenses and income
"To be honest, it's hard to make a budget. But I always say don't complicate it. Know how much money comes in the household and know how much money comes out. Write a breakdown of your fixed liabilities such as bills credit card or loan and pay it," he shares.
Rethink all your discretionary spending
"Do I need to drink three cups of coffee a day from the cafeteria or can I buy one cup a day? Mostly, these are the things that complicate people that's why they don't want to start a budget."
"By rethinking your discretionary spending, you will know how much money is left and then be wise enough to research where to use the money. It's either to use as investment or savings until such time you are confident to invest in property or whatever it is that you're passionate about," says Mr O'Brien.
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4. Research the local market
Market research and building research are vital tools in the process of finding your next home or investment property.
"When it comes to property some people rely on shallow details. Your research must be in-depth. If you have chosen a specific suburb, study about it. There are many online sources like domain.com.au that show you statistics of the house prices."
"There are also government websites like the ABS that will give you statistics about the crime and vacancy rates. These are the aspects you need to research to give you confidence in buying or picking the best location. Be open-minded, don't be fixated on a certain area. It's alright to be comfortable in an area but it's better to do a comparison," he shares.
5. Seek advice from professionals
Mr O'Brien strongly recommends potential homebuyers to seek expert advice when buying a property as they have the knowledge and experience to help you understand the whole process.
"Buying a house in Australia is not as simple as it may seem. You need the help of professionals; banker or mortgage broker, conveyancer or solicitor to review contracts, pest and building inspectors. They are trained in specific fields to give you peace of mind."
Home buyers should seek expert advice when buying a property as they have the necessary tools and experience. Source: Getty Images/Ariel Skelley
Prepare for the future
Buying a house is a serious financial commitment and since the property market is unpredictable, Mr O’ Brien says the decision whether to buy this year or next year will ultimately depend on the home buyer’s personal goal. Nevertheless, he urges those who are planning to purchase their own home to be prepared for what's to come.
