Buying Vs Renting – Are You Ready for the Commitment?
The time has come and the days of carefree share-housing have disappeared; you’ve grown tired of the rental traps we all fall into. You find a place, a home to make your own, if only for a time and with several strings attached. Don’t mark the walls or change the light fixtures, decorate to your heart’s content, but only with approvals and those are rare enough. And wouldn’t it be better to have a covered carport? Maybe, good luck pushing that one through. Tenants rarely feel in control of their housing situation, even if their names are slapped on the address details and signed on the dotted line. The most you can get is a twelve to twenty-four month reprieve, if the homeowner doesn’t decide to sell, for the Australian market, for all of its challenges, is ever booming. Can you relate? Maybe it’s time to take the next step.
Are You Budget Ready?
The B word is offensive to some, a stomach ache to others and necessary for all to sustain any long term lifestyle. If you’re ready to dive into the property market and become a home owner instead of a place holder, you will respect the B-word, you will possibly even have several spreadsheets managing your current income, generating neat comparison data to determine the best way to distribute and save your money. Cash flow management is essential. Take your current budget and factor in the costs of home ownership; scope out real estate sites, select a home in your desired area and price range and use it as a test subject. How high will your mortgage be? Have you factored in utilities? Property taxes? Insurance? Maintenance? There is a laundry list of expenses, but owning your own place is very much worth every cent.
Do You Need A Helping Hand?
Assuming you don’t have substantial capital banked and ready, it’s high time you investigated home owners grants; home loans from Fox Symes, banking institutions or credits unions; or, if you’re lucky enough to have this option, borrowing start-up cash from parents or close relatives. What is essential is a steady stream of income, as you will be beholden to whatever loans you take out and a credit file will suffer a heavy blow if you happen to default; angering the banks is possibly more intimidating than annoying your parents, but it’s best to keep real estate dealings out of the family. Before you splash out and buy a new house, ask yourself, where will I be in six months? A year from now? Will I still be working? Do I want to study again? Are we planning children? Will my or our earning potential be affected by these choices and will mortgage payments be met? If the capital isn’t a sure bet down the line, hold off on buying for now.
Are Your Debts Under Your Thumb?
We all have debt, it’s an unfortunate reality of the modern world. This is not inherently negative, as debt (when well managed) can highlight positive traits, such as responsibility, determination and money management skills. If, however, debt automatically translates as collectors calling at odd times and colourful letters in the mailbox, it might be prudent to hold off on buying a home until you can bring your larger debts to rein and you get a little distance between your freshly organised debt and any new investment.
While home ownership is something we should all aspire to, only step into the shoes of home owner and landlord if you’re secure, safe and ready to tackle hidden costs, unexpected maintenance charges and ridiculous tax rates. The real estate isn’t going anywhere, it will be ready when you are.
Category: Family Finances, Housing, Real Estate
