The prospect of entering the property market can be equally as exciting as it can be scary. Before entering the market, it is vitally important to know what you are in for, the state of the market and the magnitude of the commitment you will make.
Buying or building?
If you are thinking of entering the property market by way of a new build, or if you want to renovate or modify an existing property, it is wise to consult with an experienced, professional and reputable company, such as Coral Homes. The very great advantage of doing so is that consultation with experts will make you aware of what is possible (and what is not), as well as the financial and time commitment required. Information is definitely power when it comes to the property market and making a successful entrance.
So, what do you really need to think about before you enter the market?
Your future plans
While you may feel the rush to buy, there is often limited point in purchasing a studio apartment if you think you would like to have children in a few years. Think carefully about the type of property that suits you now, and into the future. You should also consider the stability of your employment and income, as it can be perilous to over-commit or be tied to a job that makes you unhappy just because you need to pay your mortgage and bills.
The impact of interest rate increases
While interest rates have stayed comparatively low for a while now, it is almost inevitable that they will start to rise before long. Think carefully (and honestly) about whether you can afford your mortgage repayments if rates do increase. A bigger monthly outlay usually has a significant impact and it’s worth examining whether interest rate increases will stop you from doing some of the things you really enjoy doing.
The necessary sacrifices
While you may think it’s entirely reasonable and practical to over-stretch yourself to win a property, be clear about the sacrifices you would have to make. A mortgage is a big commitment and you need to know that you are ready for this significant and long-term commitment.
An important part of this is also examining what you would do in the event of house prices falling. Some soul searching (and financial calculations) should be done to determine whether you would feel happy if forced to stay in a property that is generating little interest from the market. Formulate a contingency plan in the event of prices falling.
Homeownership reality check
It may outwardly seem glamorous and a symbol of success, but homeownership is not always easy or pleasant. There are likely to be issues such as: your hot water service breaking down, your roof leaking or neighbours that party at unsociable hours. As the property owner, you will have to deal with these.
When you own a home, you are responsible for the costs of repairs and maintenance and, if you are not completely happy where you are, moving elsewhere is not always easy or practical.
Choose your area carefully
In some areas, house prices are increasing more quickly than others. Of course, house prices are also more expensive cities than others, too.
While buying in a cheaper location may not be so appealing to you, think carefully about whether this is more affordable, practical and feasible. For example, you may still be able to commute to the city if you buy your dream home a little further out.
Understand property price trends
If you have done the research and have set your heart on a particular area, make sure you keep across the sale prices of properties in the area. You need to understand the value of properties in your preferred location and why some properties are more popular (and sell for higher prices) than others.
Before entering the property market, research is critical. You need to understand how property ownership will affect your personal situation and understand the nature of the commitment you hope to enter into.