Am I at the right stage to think about property?
FOR most Australians, owning property is high on life’s list of priorities, but when is the right stage to take the plunge?
Michelle May, a Sydney-based property flipper-turned-buyers’ agent, said it all came down to personal circumstance.
She said there was no “perfect time” to buy a property and no such thing as being “too young or old”.
”I recently met 80-year-old clients who wanted to go from a townhouse they owned to a one-level apartment. They were fit and healthy and wanted to make sure they could live independently for as long as possible,” she said
May explains the "fundamentals that come into play" when deciding when to buy.
Income now and in the future
A history of a stable, regular income, with the prospect of the same in the future is a must-have.
If the “need for stability is rising”, buying might be a good idea, May explained.
“Having your own place means you can have that purple bathroom you’ve always dreamt of. When you’re a tenant, you are at the behest of the landlord, who may up the rent regularly, stop you from making changes and also turf you when it suits them,” she said.
The imminent arrival of children can have a big impact on buying desire. "(It’s about) the need to create that family home for their child, where memories are made and pictures are hung on the wall."
But don’t try to predict the market…
Never choose to buy because of what someone says, which may or may not happen with the market.
“If you are ready to buy, then buy today, as having your own home is a long-term exercise and any short-term rises and dips in the market really don’t matter. If you find the right place, do your research and buy it,” May said.
Factors that matter
May said the most important factors for potential buyers to consider were their ability to actually pay a mortgage and a willingness to compromise, which was almost always required.
“Be realistic and honest with your budget,” she said.
The recommended path
While every buyer and situation is different, May offers advice for people at different life stages, from single millennial to retirees.
The single millennial
”The sooner you can get on the property ladder, the better, as it can set you up for life. My advice would be to go at it alone if you are in a stable job and you can perhaps get help from your family,” May said.
”Every dollar you sink into your property now will reward you in the future, and while it may sound boring and responsible, if you are a person wanting a family for the future, you will probably never have as much free time or free cash as when you do prior to having kids.”
The couple buying a first home
Be conservative and go for quality rather than quantity.
Also carefully consider the impact of losing one income if kids are part of the plan.
”Being a retiree means borrowing from a bank will be restricted and you will probably only be able to use the money from your last property sale,” May said.
”In which case, I’d say, enjoy it! Buy what you want, but think about the fact that this property needs to also work for you when you are perhaps less mobile,” she said. Think about strata levies too.