Making the decision to purchase a property is very exciting, but it is important to understand that it is a major financial commitment that should not be made without the proper consideration. Given the long-term nature of a property investment, there are some essential elements that should be carefully measured beforehand, to ensure you are making the right decision and purchasing a property that meets your needs both now and in the future.
Buying a home is a decision that will have an impact on your financial well-being, which is why it is vital to make an informed decision based on your life plans. Consider both your criteria now and how your needs could evolve over the next five to ten years. Rushing into the decision without considering your long-term plans and goals could end up costing a lot more money in the long run.
Before even looking at properties, you should sit down and determine what features you currently need in a home, as well as the features you may require in the future. A few elements to consider would be the number of bedrooms and bathrooms, the need for a garden or the number or type of parking facilities. There may also be special criteria such as energy-efficient features, a swimming pool and fireplace or wheel-chair accessibility.
Here are some examples of questions you might ask when looking for a home that will meet your future requirements:
- Do I need a home office?
- Do I plan to have children?
- Do I have children who will be moving out soon?
- Am I close to retirement?
- Will I need a home that can accommodate different life stages?
- Do I have an older relative who might come to live with me?
Everyone will have their unique criteria that will be specific to their life stage and plans.
The biggest restriction when looking to purchase a home that will fit in with your plans is affordability. Financial restrictions could mean compromising on certain aspects, even if only for the time being. For example, if a newly married couple who want to start a family need a third bedroom, but can only afford a two-bedroom home, they could find a home that they can add onto when they are financially ready. This way the home will meet their current needs while having the potential to grow into their plans.
Regardless of the type of home, you decide to buy - sustainability is a key issue to homeownership. Ensure that you can afford to sustain the financial obligation before entering into the agreement. To assess this, make use of the resources available such as financial advisers, banks and bond origination companies such as BetterLife.
Bond repayments are not the only financial consideration when it comes to affording a property, as there are other costs involved in both the property transaction and homeownership. Take these additional costs into consideration when assessing affordability as they can add up to a relatively large amount.
Another essential aspect to consider in every property purchase is location. Even if the property meets your needs, if it is situated in a bad area it is not going to be the right property to purchase. Location is a key influencer when it comes to a home’s future investment potential. It is far better to compromise on the features of the home than on its location. Purchasing a property in the right location that meets both your short and long-term needs will provide you with the benefits of an accommodating home that grows in value over time.
