So, you’ve decided to become an Australian home owner, and buy a home! How exciting!! There are so many wonderful things about buying your own residential property. This is the Australian dream to buy your own home and start a wonderful life with your family. The white picket fences the 2.5 children, the pets and so much more.
Oh wait you say, I don’t know anything about buying a home. What kind of things should I consider? How much is this going to cost, where will I look for the perfect home? It can be very intimidating when you are looking into buying homes.
Here are some things you should consider when you are starting your journey down the long arduous road to buying a home.
1) Figuring out your finances is your first step along the way to buying residential properties. What is your budget like? Do you have enough money for a down payment? Do you have enough income for the mortgage payments every month? Will you have money put aside for any upgrades or home maintenance issues? The best advice anyone can give you is to talk to your bank or lender and try to get pre-approved for a loan.
2) One of the next things you should think about is are you ready for the not so glamorous side of being an Australian home owner. Can you do it yourself or will you need to hire someone to fix any issues that come up and to make any upgrades you would like to make.
Remember there is no landlord to call and say the gas went out, come out and fix it. It will be all up to you to find someone to repair the furnace or do the plumbing or fix that leaky roof. Also you need to take into consideration some of the added bills that come with owning residential properties. Like taxes, and home insurance.
3) Buying homes can bring you long-term financial rewards, however if you are going to be leaving the area in a year or two buying a home may not be for you. For a home to appreciate in value you need to live in it and pay on it for at least 5-7 years. This not only helps your credit if you have made all your mortgage payments on time, however it helps increase the value of the house as you make upgrades and fix anything that may go wrong.
4) Something you may need to consider is being flexible and knowing that buying homes can be a bit stressful at times. Flexibility is important, you may have an idea of what kind of home you want, or the location you specifically want to live in, however things don’t always work out quite the way we want them to. You may need to be open minded about what the residential properties you are looking at have to offer.
Example: You want two and half bathrooms at least, the home you are looking at only has one and half bathrooms, however otherwise you absolutely love the house. So you can either live with one and a half baths or you can see if there is a possibility of building another bathroom later on down the line. So keep an open mind and look for the potential of the home you are thinking of buying.
Things like this as well as other issues like all the inspections getting done on time, or something needing fixed before you can buy the home, negotiations on pricing and closing costs can lead to a lot of stress when becoming an Australian home owner.
Try to remain patient and think how much you are going to love your new home once you are in it, all these little things will work out. With a great real estate agent or real estate lawyer behind you all the small issues will get ironed out.
5) When you find a neighbourhood with great residential properties and you are thinking of buying homes, make sure you ask lots of questions. Not only the real estate agent however of the homeowner also, check out crime reports for the neighbourhood, check out the school system, check for stores and shopping malls in the area, test your commute time.
All these things can be very important when you are thinking of buying homes. It is not just the home itself; it is also the location that is important. Make sure you ask about things like property taxes, homeowner association dues, house insurance, how much the utilities cost. All these things are very important when you are considering buying residential properties.
After taking all these things into consideration you should be able to make an intelligent and clear decision about buying homes. If for some reason any of these things give you cause for concern, remember you do not have to buy a residential property right this very minute. You may want to give it some time before you make the move to buying a home. Do your homework, do lots of research, talk to various realtors or real estate lawyers. The more you know the better you will be able to find the home of your dreams.
Real estate agents will tell you that you should not buy a home that is for sale by the owner, they caution Buyer Beware. Then again realtors make a lot of money on commission when they try to sell you residential properties and if you do not use a real estate agent then you save on that cost.
As long as you do your homework and research the homes you are interested in then you should be able to purchase a home that is for sale by the owner with little or no problems.
Buying a house from the owners
Here are some tips that should help you when buying homes for sale by owners.
One of the first things you need to do is have a plan. Ask yourself; how much house can I afford? Then ask yourself where do I want to live? These two questions go hand in hand as depending on where you want to live controls the cost of the home. Do some research on what residential properties are selling for in the area, this gives you an idea of what you should pay for a home that is being sold by the owner.
Getting Pre-approved for a loan is a very important step on your journey to becoming an Australian home owner. This gives you the option of knowing just how good your credit is and just how much you have to spend. Once you know how much you are pre-approved for. Remember to keep a little back for any fees or costs you may have, such as title searches, lawyers, inspections and things like that.
This also can help you when negotiating a price with the owner of the home you would like to purchase. This gives them the knowledge you are able to afford their home and can negotiate in good faith.
Your next step should be contacting the home owner. Their phone numbers are listed on their for sale sign so give them a call. Arrange for a viewing of the home. Ask questions and don’t be shy. You are making a huge investment in purchasing a residential property. You want to make sure you are getting exactly what you want for the price you can afford.
Some good questions to ask;
- Have there ever been any roof repairs, and if so, when?
- How old is the plumbing in the house?
- What year was the house built?
- Is the electric wiring up to code?
- Are there any easements on the property?
Asking these types of questions can save you a lot of headaches in the long run and gives you a good idea of what you are dealing with. If you like what you see and are truly interested in the home then tell the owner that. However, also tell them you would like to have an inspector come in and look at the house.
If the Australian home owner is on the up and up then they should have no problem with that. It may help you in negotiating the price.
Hire a real estate lawyer
Once you are satisfied with the home now is a good time to hire a real estate lawyer. If you are not too savvy about how to go about buying homes from the owners the good news is there are plenty of people to help you.
The biggest thing is you have to do the work of the real estate agent so if you do not go through a real estate agent then you should at least get a real estate lawyer to help you with all the paperwork involved in buying homes. The good news is a real estate lawyer costs far less than the commission you would have to pay a real estate agent, so you can save a lot of money that way.
The real estate lawyer can help you draw up the contract for buying the home and add to it any information about the buying of the residential property. Then you can present your contract to the buyer and negotiate any issues that may arise. The real estate lawyer can also help advise you on any other information you may need to know depending on your local area and state. They can also give you advice on any special paperwork that may need to be completed between you and the seller.
Basically all you need is your real estate lawyer and your mortgage lender to assist you with providing the payment to the seller. Now you are ready to close on your new home, all the seller has to do is sign over the deed to the home and close the deal. The very last step is to get the keys and you are ready to move into your new home.
It is not as complicated as you may have thought buying a home for sale by an owner. The most important thing you can do is do your research. There are plenty of websites and organisations that can help you in your search for buying homes with plenty of information to get you started on the road to being a homeowner.
So you want to get into the business for buying homes to renovate and then sell. This can be a fantastic investment giving you a great way to make yourself a nice income, however only if you do it the smart way. There is a lot of information out there this day and age to help you decide what will work best for you,
Five top home buying tips
There are 5 top tips for every prospective Australian home owner that can really make or break the deal for you.
Finding the Right House
This is one of the best tips any Australian home owner can give, do your homework and research the houses you are looking into. Keep in mind location is very important. Finding residential properties that need fixed up in a not so great neighbourhood will not bring you a lot of profit.
If you make the home too fancy you will lose money as not many home buyers will want to buy a home in a rundown neighbourhood.
Try to find fixer-uppers in a medium type neighbourhood where most the houses are in good shape. Then remodel the home to go along with the rest of the neighbourhood making some improvements. This will bring you the most bang for your buck.
Buying a fixer-upper in an expensive part of town can end up costing you, as you try to renovate it to fit the neighbourhood, you could lose a lot of money on a venture like that. Buying homes in fancy neighbourhoods may mean you do not have a lot of renovation to do, however then again depending on how well the current owner took care of the home you could have major renovations to do.
Remember most people looking to buy a home want it to be ready to move in to and up to standard. Few people want to do renovations or fix their own homes up. They want it done for them and are willing to pay for a house that has been renovated and upgraded.
Finding Financing can be a difficult problem. A lot of banks do not like to finance homes for investment purposes. Your credit has to be great. You need a good plan to get the lenders interested in helping you to finance your investment in residential properties.
One option you have is to take a home equity loan out on your property. Then use that money to finance buying homes. Once you prove you have a track record of taking a home, renovating, selling it and making a profit on it. Then banks and lenders alike will be more willing to lend you more money.
Of course in this day and age of more people getting into investing and buying homes to renovate and sell. Then getting financing may be easier than you think depending on your location and what state you live in.
There is a long term strategy to renovate residential properties to sell. Flipping a house too quickly can actually make you lose money in the long term. Here are two suggestions that will make it more profitable for you in the long run.
The first one is to buy the property right out and live in it for a couple of years as a Australian home owner, while you do the renovations. Once the renovations are done you can sell, this gives the house time to appreciate in value and can bring you larger profits. Plus there are tax credits that can help you out during your time of renovation.
The second suggestion is to buy a residential property, renovate it and then rent it out for a few years and then sell it if you want to, depending on if you want to be a landlord in the long term. The rent gives you cash flow that will help pay for whatever renovations you have done, plus a steady income.
Making the right renovations
It is a common consensus in the world of buying homes for renovating that more is not always better, many people who buy homes to renovate end up falling in love with the home and spending way over budget making renovations that will not pay off.
Updating kitchens and bathrooms or adding a bathroom are the top renovations that will pay off. Make sure you check roofs and spouting, as well as checking for mould or leaky basements. These are the type of things that new home owners think are the most important. Also furnaces and home cooling are at the top of the list, as well as closet and storage space.
Don’t forget about the outside of the home; remember first appearances are still the most important. A little paint and landscaping can go a long way. Just don’t overdo it, many folks who do renovations do way too much and that can eat into your profit. Do enough to make it look nice however nothing too fancy.
Here is one of your most important decisions you have to make when buying homes to renovate and sell, sticking to a budget. Once you start looking for residential properties to buy, you need to plan out your budget for renovations. Your first step should be bringing in inspectors to check out the property, once you know what needs to be done, consider what else you want to do to upgrade and improve the home.
Contact several different contractors to get estimates. Don’t just go with one or two contractors, try at least 5 different ones so you can compare pricing. If you are a do it yourself type, then check out material costs at different stores, you may get a discount for buying in bulk.
Keep in mind that almost all renovations run over initial estimates. Be prepared for some delays and projects running over cost. Almost any time you do renovations on residential properties there will be unexpected surprises that can come up, so give yourself some room when figuring out your budget.
Australian home owner summary
If you follow these 5 tips then your experience at buying homes and renovating residential properties should go smoothly for you, and soon you will be an Australian home owner. Always expect the unexpected as there are always a lot of variables that can add to your experience at renovating and selling properties.
There is money to be made in this business if you do your homework and plan ahead. Research your options, there is a lot of information out there on what works best to make the most profit, and after all that is what this is all about making money by buying homes, renovating them and selling them.