If you’ve been paying rent for some time now, chances are you’ve pondered the possibility of taking the leap and becoming a first home buyer. There are lots of questions around the pros and cons for buying your first property and in today’s Sydney housing market it may seem like a safer bet to stick with renting. In saying that if you’re smart in the way you approach your first home there are many reasons why owning trumps renting. The team at Kaplan Homes have put together a rationale on why owning your own home is worth it and offer some advice on how you can not only own your own home but custom build your dream home at an affordable price! So, read on to learn how to build smart and save money in the process.
Build your future wealth – Nobody enjoys watching their hard-earned cash to pay for someone else’s mortgage i.e. your landlords! With buying your own home you’re making a long-term investment in a property that will increase in value over time. Make sure you buy in a location that ticks all the boxes. Being close to amenities (shops and schools), lifestyle advantages (cafe culture and leisure clubs), a thriving and growing community and being surrounded by parks and other natural open spaces is a way to ensure your property will be in a desirable area and therefore have capital growth. With this in mind a great option is to build your own home in the new up and coming communities in the outer West. Areas like Marsden Park, Gledswood Hills, Edmondson Park, Austral, Carnes Hill and North Kellyville are on the up and up. If you get in now while land is still affordable you can’t lose in terms of your investment growing along with the communities it supports. So, swap out that cramped 2 bedroom flat you’ve been renting and spread out in one of the new communities springing up in the West and watch the value in your investment grow.
The house will be your home – Psychologically one of the biggest attractions to owning as opposed to renting is the stability and freedom this ensures. Paint the house lime green if you please, add that vegie patch to the back garden, knock out that wall and create an open living space. These types of ongoing changes would be impossible if you’re renting. If you build your own home, then from the start you will be able to style and layout your space just as it suits you. Some home builders offer flexibility with their designs which can be changed to meet your specific needs and requirements. Also, when you own your own home, you’ll have the security of knowing that it’s yours for as long as you please. No fear that your landlord will suddenly want your flat back or that your rental is increasing by 50%. With no landlords and no unexpected rental increases to deal with, you’ll have the peace of mind of a constant steady fixed mortgage payment. With the current low interest rates and the affordable new home build options available, your repayments may even be cheaper than your rental! Also remember a mortgage acts as forced savings. NAB puts it this way: “You’re obligated to pay your mortgage every month – putting money towards an asset that could potentially increase over time. But with renting, it can be tempting to spend spare cash rather than saving or investing it”.
Create equity in your home – Owning your own home is a great way to be able to upgrade in a few years or look to becoming an investor – the magic word in this equation is equity. To put it simply, home equity is the proportion of your home that you own. Provided that the value of your house is increasing (which is very likely if you look at the pricing history of Sydney real estate), as you pay off your loan, your equity will also be increasing. You may then be able to use this equity to fund an investment such as shares or a managed fund or even purchase another property. The forced savings from paying a mortgage and the increase in home equity can offer a huge sense of security when it comes to having to deal with an unexpected expense or if you need to reach a few of those life milestones like giving your child a good education. You’ll be able to draw on your home equity with a home equity loan, just make sure you are both increasing your home’s value whilst decreasing your mortgage debt. You can build equity from the outset by making the largest down payment you can realistically afford. By putting down at least 20% of the property’s value you’ll be giving yourself a head start.
No bones about it, there are lots of factors to consider when looking at owning your own home. Your financial resources, lifestyle, personal and family needs, investment goals and your comfort with risk are all important considerations. Let’s face it, owning your own home has always been the Great Australian Dream, a dream that many Sydney siders have been striving to achieve. The good news is many people can now count themselves as Sydney’s high achiever by owning their own custom-built house complete with all the little luxuries that make a house a home. With the right research, location, new home builder and advice you can join them and jump off that renting treadmill forever!