Buying a home? 5 helpful tips
News of the current property market reads with the air of something akin to Robert Lewis Stevenson’s famous novel “The Strange Case of Dr Jekyll and Mr Hyde”. Akin, because there are two different scenarios - a good, and a bad - being reported within the same market.
According to the QV House Price Index, homes in Rotorua and Hawke's Bay went up a staggering 7% and 5.7% respectively, over the March quarter. And Dunedin’s grew 16.7% in the last 12 months! But prices in Auckland and Wellington are going down, and there’s plenty for sale.
If you’re thinking now might be a good time to buy, read on for 5 things you should have on your radar.
Get finance early
The early bird catches the worm. Not much could be worse than finding your dream home, and then losing it, because you didn’t have the cash. You can’t just wander into a bank for quick, easy finance. Loans take time and banks aren’t as relaxed as they once were, which means they’re less generous. Getting pre-approval offers certainty while you house hunt. But remember—it usually expires within 60 - 90 days, so your search time is limited.
Know your target suburb/area
Once you find an area you like, make it your expert subject. Research its latest median prices, market data and demographics. Find out what infrastructure is planned — public transport upgrades, new childcare facilities kindergartens. You can’t have too much information!
Does it tick your boxes?
Make sure the property meets your needs, but be realistic. Can you fit your family in the bedrooms? How far are you from public transport? Is the highway too close? Is there a beach down the road? What are the growth prospects? If it’s your first house, it doesn’t have to be the ‘dream home’. Start small, buy what you can afford and go from there.
Take a long-term view
If you’ve bought in a slow market , you’re going to want to think about sitting tight for a bit. If you’re living in the property, renovate, render the front or put in an outdoor spa - improvements that will add value in the long term when you’re do go to sell. But make sure you wait for an improvement in the market before you sell. If you’d rather flip a house for a quick profit, see below for some investor strategies.
Investors must see the big picture. You need to know what the economy is doing and what stage of the property cycle you’re dealing with. You’ll have to select the right market; preferably one that’s bottomed out or growing strong. Then pick a suburb that can hold its value—good transport, lifestyle etc. It will probably be in a main city where locals have higher disposable incomes, or where renovation is occurring. You should confirm trends by examining the last ten years of growth figures. Finally; pay a fair price for the right location. Challenging enough?
House hunting can feel like a marathon. So, don’t waste unnecessary time and effort. Call me and I’ll worry about the finance for you!