Understand the different property options to narrow down the type of first home that’s right for you
Buying off the plan
Buying off the plan simply means committing to buy a place where construction hasn’t started or which is only partially completed.
You may need a deposit of 5% to 20% to secure your off the plan home, and the time taken to complete construction can provide extra time for you to build savings.
One of the key risks of buying off the plan is that the property market may change while the place is being built, and a fall in your home’s value could impact how much you can borrow.
Buy vs build
Buying an established home means you know what you’re getting. Building a new place
Choosing to build can provide savings on stamp duty too as you only pay duty on the value of the vacant land, not the yet-to-be-built home. In some states, the First Home Owner Grant is only available if you build from scratch.
Deciding on a dwelling type
It all starts to feel real when you’re making the choice between different types of homes. Here are some of the main options to weigh up.
Apartment living is becoming very popular, and it can be a more affordable choice than buying a house. A unit can also mean less time spent on chores like mowing lawns or cleaning gutters. However, you will need to budget for quarterly strata levies that help pay for the maintenance of common property.
Townhouse or villa
Like apartments, a townhouse or villa can be more affordable and lower maintenance than a house. However, your home may have an outdoor terrace or courtyard, where you can enjoy al fresco living and perhaps a small garden.
As often townhouses and villas held through strata title, you can still expect to pay strata levies.
Dual occupancies involve two homes built on a single block
A duplex is a bit like a dual occupancy in that it can be an affordable alternative to a house. A point of difference is that the two dwellings in a duplex are often linked by a common wall. Along with potential noise and privacy concerns, both homes may need to share a single building insurance policy - and you’ll be relying on your neighbour to keep their half of the roof in good shape.
House and land
If you’re dreaming of a new home, house and land packages can be
One advantage is that the house is likely to be built using modern materials and new appliances, so you could pocket the power savings of a more energy efficient home. Just be sure you know exactly what you are buying – fencing
Buying a newly renovated home
If you’re short on time or you’re just not keen on completing major improvements, buying a newly renovated home can be the way to go.
Be aware, you could pay a premium for the seller’s renovating efforts. Even if you’re okay with that, take the time to check that the work done complies with the local council’s building code. Ask to see certificates of compliance that show the renovations are council approved.
A renovator’s dream
A “doer upper” can be an affordable first
Necessities vs nice to
Knowing the type of home that’s right for you is just one step. You also need to separate the features you need from those that are nice but not essential. A second bathroom
Draw up a list of the non-negotiables – the home features you really need. This can help you stay focused when you’re inspecting different properties. Then make a separate list of the sorts of features that would be nice but which you can live without in your first home. If you manage to tick both lists, you’re doing well!
Talk to us about your first home loan – it’s your ticket to a place of your own.
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Take the next step to buying your first home
- Chapter One : Getting started
- Chapter Two : Your dream home
- Chapter Three : Money matters
- Chapter Four : Ways to purchase
- Chapter Five : Understanding interest rates
- Chapter Six : Understanding home loans
- Chapter Seven : Lending sources
- Chapter Eight : Getting your loan
- Chapter Nine : Choosing a home
- Chapter Ten : Steps to settlement