Whether you’re buying your first home or your fifth home, purchasing a new home is always an exciting time. But there’s always a constant battle between buying with your heart or buying with your head!
Purchasing with your head
The ‘buying with your head’ questions you may ask yourself when looking at a property are ‘Am I buying in a good area that will grow?’, ‘Am I close to schools and facilities?’, ‘Are there accessible jobs in the area?’ and ‘Should I be looking at 3 or 4 bedrooms for resale purposes?’. Purchasing a property for re-sale is a smart choice, but it can often contradict what the heart wants.
Purchasing with your heart
The heart wants, what the heart wants! When purchasing a property there are always little things you may want that don’t quite make sense from a re-sale or ‘investment’ stand point. Living a long distance from the city for a quiet country feel may be your cup of tea, purchasing a home with ‘niches’ that may suit you but not other buyers, or purchasing in an over-inflated area that will not see much growth, just because you like the area. These are all things that will make actually living in your new home more enjoyable and convenient, but may detract from the future re-sale of your home.
Building a new home
Anyone that has built or are building a new home will see how much choice there really is. When you do your selections you are forced to choose between 15+ door handles, then need to do the same for door stops, cupboard handles, shower heads etc etc etc. The cost of the fancy extras can soon add up, but do they actually add value to the home? And if they don’t, can you justify the cost?
Why are you purchasing/building a new home?
This is the key question that needs to be asked when deciding whether or not to purchase with your head or your heart. Are you staying long term? Is this your final ‘dream home’? Do you plan on moving and renting it out after 12 months?
The purpose for purchasing your home will have a big influence on whether to think your heart or your head. But then that’s an easy question to answer! Is it for investment or short term? Go with your head! Is it your 5th home that your building in to live in for the rest of your days? Build with your heart! But what about for those that don’t know?
What about for those who aren’t sure where they will be in 5-10+ years’ time or those who are young, buying their first home and don’t know what the future holds? I like to tell these people to approach it 80% with your heart and 20% with your head. Nearly 60% of people will live in their current home for 5-15+ years1, that’s 15+ years you may be living in this home, you don’t want to be living in something you don’t like. But you still need to be conscious and let your head take over for 20% of the decisions. Sure that $15,000 gold plated toilet or $80,000 home cinema projector looks nice, but it just doesn’t make sense does it?
This leads me to my last point, though obvious, it often gets overlooked. Live within your means! Do an accurate budget, work out what you can reasonably afford and stick to it.
Enjoy the process of buying a home, work out exactly WHY you are buying and let this influence your decisions.
Information current as of 12 April 2017
This information is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in this publication.