Questions To Ask Yourself Before You Buy

Before you even consider buying a home, it is important to ask yourself a handful of questions. It is during this self-reflection, of both your lifestyle and your finances, that it is imperative to be honest not matter how daunting the answer may be!

Is the property worth the price on offer?

This is a tricky one, and it implies the need of a plethora of market knowledge. And whilst this can be achieved by conducing a lot of research (something you should do for all properties you are considering), it doesn’t take long to find out what the square-footage cost should be for an area.

This can be achieved by looking at comparable sales in the area, something in which the agent associated to the property should provide you with, but always look for more. 

When it comes to off-the-plan apartments, you need to also consider the following:

• will the apartments’ views be built out?
• what else has the developer done, and how did it go?
• what builders have been assigned to the development?
• is there a rental guarantee, and if so who is guaranteeing it (take with caution)?

Can I afford this property?

This questions is often confused with ‘what will the bank lend me?’ The bank can sometimes offer you more than you can afford - so once you have been pre-approved for an amount, figure out the total payments (including interest) that are required each month, and whether or not you can meet those payments. 

It is all well and good to get excited about getting approved for $100,000 more than you expected, but if you can’t realistically meet the repayments, then only borrow what you have budgeted for. 

Not meeting your payments on a monthly basis doesn't make your credit score look strong and healthy, so make sure you can pay that monthly fee every month with no excuses

Remember that banks cannot offer you the current interest rate, as they need to protect themselves for future changes, therefore your interest rate will at least be a few points higher. 

Is this property a short-term investment or are you in for the long-haul?

This is an important question, and it is okay if you don’t quite know how to answer yet; but ultimately ask yourself this: ‘is my plan to sell this property within 18 months?’

If you have answered ‘no’ to this, then carry on with your hunt. However, if you have answered ‘yes’ to this, then there is a whole lot of research you need to do.

As an investor there are certain things you need to do in order to make it viable.

Ultimately, an investor purchase is designed to save capital investment and increase capital return. If you’re purchasing an apartment as an investor, be sure to click here and familiarise yourself with what you should do.