Real Estate Review: Four Questions to Ask Before Purchasing a Home

by Greg on November 7, 2016

buying a house

Purchasing a property, like getting married, is one of the biggest commitments you will ever make. The average home buyer in Australia will sign on the dotted line and commit the following 20 to 30 years of their lives into their purchase. With property prices on average doubling every 10 years, making an astute property purchase can be the most rewarding or the most dangerous investment of your life. With this in mind, there are four main questions you need to ask prior to saying “I do”.

  1. Is this property a good long term investment?

Do your homework on this one.

Research the suburb of your choice along with surrounding suburbs and monitor trends. Typically suburbs in desirable locations close to the city and/or beaches are always going to be just that – desirable.

A quick look at sites such as http://www.marshallwhite.com.au/suburb-guides/brighton/ will give you a strong case for aspirational living. Purchasing within the metropolitan transport network is another consideration, but don’t rule out areas that have potential for transport expansion in the future.

Melbourne’s Eastern and Bayside suburbs have always been strong performers and with the interest from overseas buyers increasing with no sign of easing up. Figures from the top Melbourne suburbs according to the growth in median prices bare this out with Eastern and Bayside suburbs starring at the top of the list. The likes of Box Hill, St Kilda, Mont Albert North and Mount Waverley and their surrounds have recently jumped well over 30% in a year.

  1. Will this property suit my lifestyle – now and in the future?

Whist the new wave of televisions renovations shows may give you the impression that adding an extension to the back of your property is a quick, cheap solution to a lack of space, the reality for those without a free team of tradesmen on call can be a nightmare of expense. Anticipating future additions to your family and purchasing your property accordingly can save you the necessity of being faced with future additions to your home. With all the costs associated with buying a selling a home, getting it right the first time makes sense.

  1. Will I be able to afford the repayments?

With interest rates bottoming out, it can be tempting to ignore the interest rate motto “what goes down, must go up”. Even small interest rises can make a large impact on repayments, especially if you are already pushed to your financial limits. Taking the time to sit down and crunch the numbers can save you a lot of heartache should interest rates take a turn for the worse.

  1. Am I seeing the property for what it really is?

As mentioned earlier, the spate of television renovation shows have taken selling a house to a new level. Staging a house for sale has become a huge industry and it is easy to be taken in by appearances – freshly planted, low maintenance gardens, beautiful modern furniture, artwork and cushions – these are all temporary and all designed to dazzle you into the fantasy of a lifestyle. Seeing past these to the reality of the house is imperative to avoid disappointment once you have been handed the keys. Do your due diligence and get your inspections done. A house make look bright, shiny and new but don’t be fooled by the facade!

Like marriage, property buying is (usually) for the long term. Don’t fall for a pretty face with no substance. Do your homework, check out all your options and you may just get your happily ever after.

{ 2 comments… read them below or add one }

Cameron Garry November 9, 2016 at 8:37 pm

Nice post Greg. All these questions are essential for investments in any kind of property (Commercial/Residential).

Thank you for sharing this useful information.

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Charlie Budnjo November 20, 2016 at 10:58 pm

Great post Greg with some very useful points raised. I believe that knowing your reason for buying is also a crucial question to ask as it will have a big impact on how one would approach the property search and evaluation process.

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