What Did You Wish You Knew before Buying Your First House/Apartment?

The +1 and I are starting to look for our first House/Apartment starting tomorrow due to the restrictions easing here in Melbourne.

Any last minute advice before I succumb to a lifetime of debt?

Comments

  • +12

    Strata fees are a scam

    • +3

      Yep, defintiely very aware of these fees, great point

      • yeah this

        think about whether you will use those 'free facilities'

        some higher end places have gyms and pools and stuff

        yes for $1,500 per quarter

        that's $6,000 a year out of your post tax income!

  • +36

    Cash only and meet up for payment

    • +3

      Ask for 15% off and be prepared to walk.

      • +2

        15% off is when I'm at a new car dealership getting heavy with the dealer principal.

  • +4

    Look into whether owning a house/unit is the right financial choice, especially if rates rise by 5% within the terms of your loan

    • +1

      inb4 "they're not going to raise interest rates because then everyone will default"

      But completely agree, never have we been so at risk of being affected by inflation.

      • 5% over 30 years is probably fine, it's not going to be 5% over 5 years

    • If it helps, the major banks usually check your serviceability using 4~5% rate (depending on the bank). It used to be higher before easing of restrictions by APRA.

  • +6

    stop calling them by +1 or else it might become -1

    jokes aside,

    • neighbours are important, good ones anyway,
    • convenience of food selection and groceries,
    • not on a flood plain.
    • north facing backyard
    • +2

      I prefer more endearing terms such as

      Other Half
      Misso
      Ball and Chain

      • I prefer

        Credit Card
        Baby Daddy or
        This Guy

  • +18

    In an apartment, i'd be looking for a 70's double brick banger. They are robust, the issues that you generally see in them are verrrrrry minor in comparison to the issues you can get in newer places. Also can be much better than some newer builds in terms of sound. Obviously this is not always the case and it always pays to assess the entire building and review the contract of sale (body corp meeting minutes).

    In my experience strata fees are not a scam, if you get a place with decent body corp (under $1800 p/a) then you're basically paying $800-1k for building insurance, $400 for a gardener, $400 in admin costs + bits and bobs of other stuff. I can see how someone would think strata is a scam if you're paying thousands a year on a newer build with no issues.

    Engage a conveyancer before you start looking, send them the contract of sale for review prior to making any offers. They can often see things that you cannot see. I have a good one if you want, just shoot me a message.

    I'd also recommend looking for places that are photographed terribly, this is generally where you'll get the best bang for your buck. You may go to multiple crap places before eventually stumbling upon something decent.

    Best of luck!

  • -1

    Look into other investment options, particularly things like Vanguard ETFs. I think if I started all over I'd probably have invested all into ETFs rather than buying a few investment properties.

    Just so much less stress, you can easily sell the shares to get the money out, don't have to deal with tenants etc. - it's just all around an easier investment.

    Obviously different if this is a house to live in… but even then I'd look into whether it's cheaper to rent vs. buy.

    • +4

      OP is looking for a property, and asking first home owner questions, not investment advice. Otherwise, this thread will devolve into muh ETFs, YOLO, crypto, and all on black.

  • +5

    wife many moons ago bought her first property/apartment. it was a 1 bedroom + Study with carpark.

    when she settled property and moved in, little did she realise that her carpark spot was on the 7th floor. Going up/down 7 car park floors on daily basis drove her nuts. She ended up parking on the street most of time. so just check what you are actually getting and where its located.

    • The worse car spaces are up against a side wall. Its a pain to get in.

  • starting to look for our first House/Apartment

    Is this going to be your new home or is it an investment? They're very different sets of requirements.

    • Fair, home to live

      • +1

        In that case, my advice would be to not get into this state of mind where you keep thinking "future resale value" and things like "how much rent can I get for this later?"

        "Home" is about comfort and enjoyment. Sometimes you just need to spend that little bit more to get what you want and the way you want it, knowing that you won't necessarily get that money back when you sell later - especially you plan on living there long term.

  • +7
    • Check the location at various times if the day not just when the open home is. This way you can find out if there are dogs barking next door, or loud music, or weirdos wandering around. And in winter, especially if either of you have allergies or asthma, if someone uses a fireplace badly nearby.
    • Inspect everything in your pre-settlement inspection. Mine turned out to have a non-working rangehood but I didn't realise until after moving in. Operate the heating and cooling systems and make sure they work. Take your time, you have as long as you want.

    Things to think about
    - is it near public transport
    - are there nice walking paths near it
    - can you walk or ride to the local shops
    - is it in the catchment of a decent school (if you're going to have kids in future)
    - is there room in the garden for a granny flat or studio (if your parents may move in or when your kids become teens one may prefer to live out of the house)
    - is there enough room to park the number of cars you have + 1 (when your kids are teens and have a car and for when you have visitors). If not is there street parking nearby
    - is the area good/safe for pets (is there a dog park you can walk your dog to, are the fences high enough and backyard suitable, is it possible to make a cat enclosure or is it in a safe cul de sac if you let them outside)
    - is the place suitable for your gardening aspirations - will it require a lot of maintenance if you hate gardening and is there enough space if you like gardening / gardens facing good direction

  • +4

    That all real estate agents are lower on the life chain than used car sales people. You know when they are lying, because their mouth is moving.

    I would seriously trust anything an Indian call centre scammer said over anything a REA says.

    • What about an Australian call centre scammer?

      • Still far more trustworthy than a real estate agent…

  • Be careful with some conveyancer reviews. I got slugged a few hundred for a strata report review for an auction I didn't even attend.

    Consider the size of the block and how many units there are. If strata decides to sell to a developer you get a bigger share.

    I think blocks pre-2000s are very safe and sound.

    Look into popcorn ceilings, might be something you're worried about.

  • +1

    The main outdoor entertaining area facing a certain direction. Our backyard faces east (in WA), and we get hammer with wind all the time.

  • +2

    probably don't buy an appartment, buy a house it will appreciate quicker and you have more control over it

  • That when the REA said it would be built by February he meant October.

    • +2

      4 months early. What's your problem buddy? 😃

      • Very ungrateful really

      • Mine actually did finish 5 months early, was really a pain as wasn't ready with full deposit amount

  • Unless it particularly suits your short/medium term lifestyle steer well, well clear of buying an apartment. Zero capital gains and most likely you will have a capital loss when coming to sell.

  • +1

    Small ones for me are,

    Becareful if they have candles around, I saw an apartment block like that then noticed the water pipes had a piece of plastic on top. I'm almost sure there was a smell coming out the pipes and the scented candles were to cover them up.

    Becareful of sounds, another place I went to, there was so much "talking" from the agent, and you're doing a fairly fast check, I didn't realise how loud it would be trying to sleep at night with the cars and trucks drudging down the driveway.

    Not really a buyer, but I rent out in apartment blocks and there's some strata rules (legal or not) where its made me (and other renters) want to leave, this could affect your potential future rent. (rules like no visitors after x time etc).

    Don't trust the Real Estate Agent! Do your own research!

    If you're buying new you can't get a strata report, but you can research the builders older buildings and try to get theres!

    Last one and I think a big one. CHECK your states Public Register, for example in NSW you can check the "real estate agent, conveyancer and builder": https://www.onegov.nsw.gov.au/PublicRegister/#/publicregiste...

    • prior real estates have at one stage or another have said

      -oh this will be a great investment property to park your cash/money
      -this one is provides great tax benefits via negative gearing
      -the market is growing by XX%. This property is a good buy
      -this property is on a big block with lots of subdivision potential

      a) real estate ain't licences financial advisers
      b) real estate agents are not registered tax advisers
      c) real estate agents are in the business of convincing people to buy property. they will say just about anything to seal the deal
      d) real estate agents use/rely on subject to council approval. they ain't always privy to council overlays or minimum garden space requirements if subdividing.

  • Any pros/cons with a property near bushland? (regional NSW)

    • -1

      Con - fire
      Pro - wildlife

    • Pro - wildlife
      Con - snakes

  • Don't spend all of your money, borrow less than the bank will lend you.

    • +2

      I was going to say almost the opposite - we borrowed less than the bank was offering and paid our mortgage off in no time. I wonder if we’d extended ourselves further what we could have got. Love our place and location though…

      • depends on the climate too. same story as yours. we bought well within our means and could have extended ourselves more. Bought our first in 98, just before rapid house price growth and for us we had rapid wage growth (I was at uni at the time of purchase).
        We bought primarily based on location proximity to family.
        .

  • Just buy now and worry later. You are what we need to keep the economy going 🤙🏿

  • Don't worry about the mortgage. You've 30 years to pay it off.

  • +7

    Use a conveyancing solicitor not a conveyancer.
    If considering an apartment, book an appointment with the strata company to inspect the records yourself, it’s a flat fee plus hourly rate plus photocopy and about 25% the cost of a bullshit report. You are looking at the ten year plan, recent quotes for repairs/maintenance, evidence that the committee is proactive not reactive, special levies and the minutes of the last AGM.
    Strata fees with apartments can get astronomical, as a general rule, block of 14 or less, no elevator, no pool, no gym, none of that luxury cos it costs big $ constantly.
    If you can’t afford a house look at a townhouse, villa, duplex then apartment.
    Calculate stamp duty on your purchase, it’s money down the drain for the privilege of property ownership but you need to be able to have that throw away cash in the bank.
    In settlement you need to compensate the seller for the council rates, water rates and strata rates they have prepaid in advance plus the bank and government have all sorts of small fees they never divulge that add up to hundreds of $.
    Research the best home loan deal yourself then approach a broker to see if they can beat it
    If holding long term, do your calculations looking to forward income and make sure you can afford it if interest rates go to 6-8%, a historical average.
    For an owner occupier use an offset account rather than paying off extra principal.
    Always be practical and try to remove emotion when viewing a property eg the one thing you can never change is the size of an apartment but you can gut it and modernise it to look like it’s brand new. On the same note, a brand new property is going to be worth the same as a shit hole in 25 years.
    Don’t buy new furniture and fittings until you are actually living there and do it slowly and considered. If it’s a unit everything needs to be multipurpose or contain storage.
    Adopt a lifestyle philosophy of only ever buying what you need not what you want.
    In the next few years the great Australian lifestyle we know will vanish when we have to pay back the covid cost. Income tax will increase, GST will probably double, in effect our take home pay will be less and our cost of living will increase, calculate your budget with that in mind.

  • I wish I'd known that if I got an offset account, I'd have been able to redraw the offset amount to buy the next house I moved into, then rent out the first place and have the interest tax deductible. As it was I had a redrawable loan, so having paid it off before buying the next place, ATO consider the redraw to go towards the next place (PPOR) so was not tax deductible.

    All trivial issues compared to the benefits of buying in 2001 when you could get the whole house for the price of a 20% deposit these days.

  • +2

    Avoid "well presented" houses/units if you can.

    The better presented it is, the more likely you are to get into an emotional bidding war (auction or private treaty) with other first owners as well. You will end up paying $50k-$80K for $5000 worth of painting and gardening.

    The value is in houses that are well maintained, but presented poorly.