Home News First-time buyer 7 do's and don'ts

First-time buyer 7 do's and don'ts

Font size :
Considering a property investment? Before you begin skimming the online listings and contacting real estate agents, have a look at our expert list of do’s and don’ts, designed to help you avoid making the rookie mistakes that send many first-time investors off track.
1. Don’t DIY – unless you have the skills
Investors often seek out cheap properties that they can fix up to boost the home’s value, but you shouldn’t embark on major renovations yourself if you don’t have the know-how or experience. Map out a renovation budget and as a rule of thumb, add 10-15% to your final cost projection to allow for unexpected or additional expenses.
2. Do your research
“There’s a whole raft of things you should be looking at, but very few investors undertake the actual due diligence on what it’s going to cost to hold a property,” says Fiona Herbert, an accredited mortgage consultant with Leap Frog Loansprocess. Speak to an expert if necessary so you can make sure you’re going in with both eyes wide open.
3. Don’t count on low interest rates
As the last few years have demonstrated, interest rates can flip on a dime – and you have no control over it. If a stable mortgage repayment to you is important for peace of mind, then consider a fixed loan product. Otherwise, make sure you have strategies in place to deal with higher interest rates if and when they do increase.
4. Do pay your bills on time
This means paying your credit cards on time and avoid overdrawing savings accounts. If you don’t have your finances and bills under control, it can be difficult to demonstrate a responsible attitude to money management, and “lenders are less likely to loan money to someone whose accounts are ‘irregular’,” says Herbert. “I recommend people ensure their account conduct is ‘clean’ for at least three months prior to lending, and preferably six months, as lenders can and do ask for savings statements for this period for first-time buyers.”
5. Don’t be shortsighted
Remember that buying property is an investment, so you’ll need to look after your property in order to attract and maintain good tenants. To make a bigger profit at the end, you must be willing to spend some money along the way.
6. Do – engage a good solicitor
Choose someone who has invested in property themselves, advises Jo Chivers, director of Property Bloom. “This is important for all of the people you surround yourself with, as the more property transactions they have handled, the more experienced they’ll be,” she says. “This may be your first investment but hopefully it will lead to many more property purchases for you – so the time you take now to set up your team will be rewarded.”
7. Don’t let your emotions cloud your judgment
The lead-up process to choosing that first property can be emotional, but you “must take the emotion out of it,” says Herbert. “So many people buy a property because their friend told them about it, because they liked the marketing, or because it’s in the next suburb and they drive past it every day. Go out and do some hard yards.”
7. Do ask the important questions
“Property investing is not gambling money away; it’s a significant business decision,” says Herbert. “So make sure you ask yourself: how much money do I need? What’s the return going to be? Is this the best place for my money?”

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

House prices return to more affordable levels in mining towns House prices return to more affordable levels in mining towns

While the end of the mining boom caused property prices to collapse, on the plus side, homes are more affordable again Read more

Borrowers should anticipate a possible rate hike Borrowers should anticipate a possible rate hike Some experts advise borrowers to look for a fixed loan that allows extra repayments so that they can whittle down the balance sooner ... Read more

Why choosing the right mortgage is hard for first-home buyers Why choosing the right mortgage is hard for first-home buyers Many feel overwhelmed by the sheer range of products and interest rates on offer, a new survey reveals ... Read more

Mortgage applications drop in second quarter Mortgage applications drop in second quarter This marks the “beginning” of a downward trend, says Equifax executive ... Read more

More mortgage news and articles

Sponsored Links

Wednesday, Jul 26, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
  • How much do you want to borrow?
  • How much deposit do you have?
  • How much is your house worth?
  • How much do you still owe on your mortgage?
  • What type of mortgage do you have?

  • How much is your new home?
  • How much do you want to borrow?
  • How soon do you want a mortgage?
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords