If you dream of owning your own property, whether to rent out or to live in, you will find that if it is a landscape you have not previously negotiated, it could get a bit daunting. The property business often seems as if it has its own language, and it is essential that you know the terms and what they mean before putting pen to paper. There are also some other mistakes people commonly make when buying a home, and these include:
1. Taking out a mortgage that is too expensive: While you may be approved for a mortgage for the property, you have to have an idea of how much you can actively afford in the short, medium and long terms. Realistically your mortgage should not set you back more than a third of your income, and if the property is rented out, you should take into consideration how much money you will have to add to the rental income in order to meet the mortgage. Rentals very seldom meet the entire mortgage cost, so don’t forget to be realistic when applying for a mortgage. Also keep in mind the mortgage terms – this may mean that if interest rates go up that your mortgage will cost more!
2. Forgetting about hidden costs: In this country there are several things that add to the cost of buying a property. Transfer fees, the cost of a conveyancer, the estate agent commission, repairs, and maintenance should all be accounted for in the final budget.
3. Not making use of professionals: While it could be tempting to save on the estate agent commission by buying the home privately, you will not be doing yourself a favour. Think of how much time and hassle you can save if you get a professional to do all the legwork for you! Even online estate agents have all their listings ready for you to see online, and this will enable you to make the shortlist shorter and the hassles less. You also need someone who is keen to look out for your interests and help you to get the best deal possible.
4. Forgetting about the neighbourhood: While you may find your ideal home in any suburb, it is vital that you check out the neighbourhood. A bad neighbourhood can make or break your investment, and it is advisable that you speak to estate agents and read local newspapers to find out more about the best locations for the most sensible investments. If you have children, you will want to be relatively near a school, and if you plan to rent to students, you should be as close to a campus as possible. The quality of the area’s amenities and facilities is also very important, and so is the crime rate – stay away from high crime areas!
There are many more mistakes you can make, but experts recommend that you speak to an estate agent first before making a commitment!