It is an exciting time when your name is listed as a property owner for the first time. Often a herculean task the gather a deposit and select the right property, as the purchase of property may have put a financial or legal strain on you. Even when a deposit is in place, the process can be lightly and complex with several steps across the seller or agent, your legal council and your loan broker or bank. Sound advice on property investment strategies is necessary to make informed choses at each and every stage of the process.
Groups, couples and individuals acquire property with different intentions. They must ensure that they get the kind of real estate that matches their aspirations, lifestyle or financial goals.
A property should be selected for the best price and with the best prospects for growth. A property may be constructed or undeveloped, furnished or unfurnished, occupied or vacant, lease or freehold title. The best strategy is to buy property ‘as is’ and ad value over time through renovation or redecorating.
Home loan for a first home-owner can be secured for almost all income bracket, however interest rates may vary. Banks however have to ask for many details and financial history. This is because they have no prior information to conduct a risk analysis. The difficulty may lie in finding a property that matches the portfolio of the buyer(s). If a housing project has not been zoned onto, then an effective search for the right house will ensue.
Buyers tend to concentrate on matters such as the neighborhood or the architectural design. These are important pointers for a good property but the first thing should be reason for the sale. The history and future of the property must be taken into consideration first and foremost. This avoids future conflict or future dissatisfaction with the property.
Acceptable reasons for sale of a property
It would be regrettable to acquire a property that is under a court injunction or has an outstanding loan. Sometimes sellers may not be forthcoming about the status of their property. It may be up to the buyer to conduct a background check. Good reasons would include:
- A new housing development
- Selling because the owner is relocating
- Sale by a company that is divesting its property
- Foreclosure by a financial institution
It is ideal to capture a foreclosure at a throw-away price if you spot and the opportune moment. However very shrewd negotiations, preferably directly with the lender, and a lump-sum are required. Rarely does a first home buyer employ this strategy, despite its inherent savings. More straightforward transacting is to their liking due to the pitfalls of this kind of transaction.
To set your first property purchase up for success, check the current market rate against projected growth and adjusting for inflation. Based on these calculation and the term of your loan its should be a simple process to calculate a potential return and repayment plan. In some instances a compromise might have to be arrived at to bridge what is desired with the cost. If it proves difficult to get the size of house intended, there may still be room for future improvement.
A good property from a housing project or ex-government dwelling, may quickly prove to be a great investment. It may immediately be available for renting or may in a few years have appreciated in value. These factors are important because one can borrow against the property or use rental income to offset the mortgage. Employing the appropriate strategy will save the buyer some dollars and maintain good credit rating.