The home loan application process
You’ll hear plenty of clichés in the property game. There is even a television program called ‘Location, Location, Location’. Some you can safely ignore, as they’re not based on any real evidence. But there are some common property clichés worth taking notice of, because they do hold an element of truth at their core. Here are four sayings you might want to keep in mind when you’re looking at the property market:
The thought of renovations can be very off-putting for home buyers – and with good reason. Not only does it add to the property costs, but it can make life a little unpleasant as you endure loud drilling, dirty floors and lots of plastic sheets.
But if others are turned off by renovations, you could pick up a bargain with a fixer-upper on a prime block. A few thousand dollars on home improvements could increase your capital value by thousands.
And remember, a property’s value can often be more dependent on the land it sits on, rather than the house itself. Securing land in a prime location is a huge advantage. Even if the house needs a little TLC, you are less likely to lose the value of the land.
Unless you’ve been living under a rock, you’ve probably heard about the booming property markets in Sydney and Melbourne. But not all suburbs rise at the same rate and some have even retracted during the boom period. It’s critical to pick a suburb that has the potential to grow consistently. Often recent property sales are a good indicator, as are the markets supporting the suburb’s growth. For instance, if your desired suburb gets its revenue from a boom and bust industry like mining, it could be a while before it gains momentum again. A free RP Property Data report can provide you with recent sales history and suburb data.
When choosing a suburb based on its median property values, just be aware of how much you can afford to borrow. It might be worth comparing your home loan options (rates and features) and calculating your potential mortgage repayments.
If you’re in the market for a new dwelling to live in, rather than an investment property, you have to trust your gut. That doesn’t mean not doing your due diligence, with numerous inspections and property reports, but it does mean listening to that nagging voice that says something isn’t right. If you have doubts during the sale process, investigate your reasoning and make a rational choice based on all of the available information. If, on the other hand, you feel at home immediately, you may find you’ll overlook the little imperfections.
You’ve no doubt read about how house prices in Australia have increased steadily over the last 20 or 30 years. That’s true on average, but in most places the increases are not that steady at all. Particularly in the capital cities, house prices tend to increase in spikes over a short period, then stay flat or even fall in the periods in between. It’s really important that you understand where in the market cycle you are. If prices in your area are rising rapidly, it’s generally a better time to think about selling. Conversely, if prices are falling or static, it’s usually the better time to buy.
There’s never any guarantees in the property market, but these simple tips have stood the test of time and are worth thinking about when you’re looking at real estate. As always, do plenty of research and get plenty of advice from the right people before taking the plunge!