First Home Buyer - Dilemmas with Choosing What and Where

blueyez on 04/09/2022 - 20:19
Last edited 04/09/2022 - 20:22

Hey all,

After many years of thinking about buying (kicking myself it's taken so long) - I am finally ready to commit to buying a house solo.

My main requirement is 2 bedrooms minimum, so that I can live there myself and hopefully rent out the other room. I was hoping to avoid apartments and anything with body corp. I do have areas I like more than others (ie. north over west, in Melbourne)

My dilemma is that I don't have many people to turn to for advice and have a few things running in my mind;

  • I have a unique position in that my brother is selling off his unit which has little interest in it. I could potentially try to come to an agreement with him where I give him part of the deposit directly in order to reduce the bank loan required (obviously with everything being written up in clear terms), but the pitfall is that there is body corporate to pay each year and I'm not a huge fan of the suburb. However it is convenient to transport, shops, etc. It probably will not grow much in value in the years to come

  • there is another unit closer to my parents house which I do like the look of, however the area is not desirable for myself. It is also pricier than my brothers unit despite being one suburb over, however does have solar panels as a bonus.

  • buy a unit or townhouse closer to a preferred area that hopefully fits into my budget.

  • continue a longer search to find a house that could fit my budget, or move further away from the city to live in a bigger property.

  • go as far as looking interstate..?! Though comparing all the First Home Buyer grants, this might not be worthwhile…

I'm looking for tips from others who've already bought their first home and your opinions on how to make this milestone decision.

Financial

Comments

  • Benoffie on 04/09/2022 - 20:48
    +6

    Id wait. The market hasnt finished correcting.

    Also, if your brother's place has no interest from others, youll only be taking on the same problem.

    • netjock on 05/09/2022 - 09:49
      +2

      Depends. If OP is paying $450pw in rent then two years is $46k. If the unit is only $500k (units probably cost $300k to build given the cost increases). In correction situations only those in dire financial trouble would sell (like house builders going bust).

      Imagine if prices went down 30% a lot of people will be in negative equity which means they can't move at all. Not going to $0 and rent for $23k a year.

      Houses are a bit like shares. You can never pick bottom or the top but if you hold for the long term you will get your money back and some. If you think you are some kind of traders then you might get into some serious trouble.

    • Drakesy on 05/09/2022 - 10:20
      +2

      Agreed, market hasn't adjusted yet, New Zealand is still going down (and they're probably 3-6 months further into their interest rate rises).

      My signal is when New Zealand houses start to stabilise then we'll be 3 months behind.

      Don't need to read too many articles of people being trapped in negative equity and trying to refinance to see that owning property isn't as rosey and Lifechanging as it used to be.

      If you want stress, catching a falling knife is how i'd go about it.

  • [Deactivated] on 04/09/2022 - 20:48

    don't end up buying something you'll regret for the convenience of it.

    it sounds like you don't really want your brothers unit, but it would be the most convenient place to buy.

    maybe you could ask your brother if you could stay there for a few nights, to see whether you'd like living there.

    go for what you really want, you're going to have to live there, after all, and there's no guarantee that you'll be able to get your money back if you decide to sell because you don't like it.

    • blueyez on 04/09/2022 - 21:01

      My brother has lived there for over a decade, I'm familiar with the place and location. I've stayed over before too.

      It's not a horrible location, I just don't think I like that area much (it's under 15km from city, 20min train ride, 10min walk to shops/food/shopping centre)

      What's great about it is that can be locked up and stay quite secure, if I needed to go away (assuming I lived alone)

      Guess it's hard to know what to struggle with lol

  • Halo375 on 04/09/2022 - 20:49

    Its a great time to buy, only challenge is not a lot of properties on the market. Start with understanding what you’re able to borrow and what you want to borrow (there is a difference, don’t over extend yourself). Try to think about what you want now and what you might want in 10 years with a family - public transport is a big deal, is it a good rental market, is it convenient for you? This decision should take you a while - figure out your suburbs first and then go from there.

    • avoidfullprice on 04/09/2022 - 20:53

      Try to think about what you want now and what you might want in 10 years with a family

      Does depend a lot of where OP wants to be!

    • blueyez on 04/09/2022 - 21:02

      I'm already looking at just sticking to a low budget. My income has increased but I don't know if I'll remain in this industry or at this level of pay, so I'm basing my search off a lower income and smaller loan amount.

      I hope I'm not solo in 10 years time… but I don't think I want kids… so might not really need much of an upgrade in future. The areas I really love I can't afford - not on my own, anyways.

    • Drakesy on 05/09/2022 - 10:22

      we're about 12 months off it being a great time to buy.
      Just need to look at New Zealand to see we're in for a big dip.

  • screensaver on 04/09/2022 - 20:51

    One tip that may work,, make an offer a little below, and also shop around. You can do a lot of looking in a short time online

  • boomramada on 04/09/2022 - 22:23

    As a first home, concentrate on the location and size of the land more than the rooms etc. So you could go for better second home or investment later.

  • hentabara on 05/09/2022 - 08:10
    +1

    If you are not sure, you can always buy somewhere else where you think you will be in 10 years (with partners and kids, and something that is having good rental yield or future growth) , and keep renting for your current lifestyles. It depends on your strategy.

  • elgrande on 05/09/2022 - 08:15
    +1

    I was hoping to avoid apartments and anything with body corp.

    Proceeds to list options with body corp.

    • jellykingdom on 05/09/2022 - 09:50

      None of the options he's listed would avoid body corp….even townhouses have it. And he's talking all apartments/units

      Even my first apartment, in a block of 4, had strata. And it was still $650/yr because obviously there weren't enough units to make up the funding otherwise!

    • blueyez on 05/09/2022 - 13:10

      That's only due to my brothers place being a cheaper option, that's in this scenario

  • ForkSnorter on 05/09/2022 - 08:16
    +5

    After many years of thinking about buying (kicking myself it's taken so long) - I am finally ready to commit to buying a house solo.

    With all the price increases since 2019 plus the recent interest rate rises, buying a house solo is pretty hard.

    My main requirement is 2 bedrooms minimum, so that I can live there myself and hopefully rent out the other room.

    After living in share houses most of my life, I'm happy I no longer have to. It's a pity that even after buying your new place you'll still need to share with someone you don't know well. It's unfortunate that house prices in Australia are so high that people can't afford to buy their own place. If quality of life is more important to you than financial return, you could even consider a 1-bedroom apartment if it's substantially cheaper and still big enough for you.

    I was hoping to avoid apartments and anything with body corp. I do have areas I like more than others (ie. north over west, in Melbourne)

    Body corporate has an undeserved reputation. It can actually save you money because the body corporate committee will keep your property cleaned and maintained in a proper condition and deal with problems before they become a disaster. The insurance (which is included in the body corporate fee) is shared, so it will likely be much cheaper than insurance on a house. Just for example, many people spend >$3k on their house insurance each year. Plus the body corporate fees often get you nice facilities like private pools, gyms, etc. which you don't have to clean or maintain yourself. Owning your own pool could cost you $3k per year in electricity, chemicals, cleaning costs. If you want it heated in winter, it could cost you a fortune. All things compared, owning an apartment is cheaper than owning a house when you consider the rates, insurance, and maintenance cost. Having said that, I would still prefer to live in a house than an apartment, as long as it's a nice one and not some ugly asbestos shack surrounded by dogs barking on all sides.

    It probably will not grow much in value in the years to come

    Will house prices grow much in the years to come? In my opinion, they're at an unsustainable level already. Apartment prices actually have room to move.

    there is another unit closer to my parents house which I do like the look of, however the area is not desirable for myself. It is also pricier than my brothers unit despite being one suburb over, however does have solar panels as a bonus.

    You should buy a property that you love. Preferably in an area you love. All things considered, position should take priority. The worst house in the best area is probably better than the best house in the worst area (without going to extremes).

    continue a longer search to find a house that could fit my budget, or move further away from the city to live in a bigger property.

    It would be easier to buy away from the city if you have a partner to do it with. Otherwise you could get lonely if you're a long way from friends and family.

    go as far as looking interstate..?! Though comparing all the First Home Buyer grants, this might not be worthwhile…

    I had a browse on realestate.com.au the other day. Apartments in Brisbane and Perth are dirt cheap at the moment compared to Melbourne and Sydney.

    • MITM on 05/09/2022 - 10:47

      Apartments are always dirt cheap in Brisbane and Perth compared to Melbourne and Sydney - always.

    • blueyez on 05/09/2022 - 13:11

      Thank you for your insight. I can afford the place on my own, I just want to pay off the mortgage quicker =)

      The reason I added extra options like interstate etc is that maybe I can suck it up for 12 months and maybe buy something else in future.

  • Duckie2hh on 05/09/2022 - 09:28

    OP, we need budget and location (i.e., north east, south east, etc).

    • blueyez on 05/09/2022 - 13:13

      I don't know my current budget due to income change I need to be re assessed for loan capacity. On my old wage it was 400-500k which is what I'm looking at. Preference is northern suburbs of Melbourne so that I'm not too far from my parents.

  • TimmyTims on 05/09/2022 - 10:50

    Best advice I can give is to write down a wish list for what your ideal property will have, eg, 2 bedroom, no body corp, side by side parking for 2 cars, backyard for pet, etc.
    Then re-write this list in order of what you're willing to compromise on. The absolute must haves at the top, and nice to haves at the bottom.
    ( you can take it a step further and add weighted points to each item to give each place you look at a final score)

    Then look at say 10 places online and mark them against your list. You'll quickly see what you need to compromise on or what else you may want to consider

    • blueyez on 05/09/2022 - 13:13

      This sounds like a good plan of attack!

  • cupcake on 05/09/2022 - 15:57

    If you can afford to buy now, then why wait?
    In general, people do well with property.
    Being hesitant and inaction doesn't actually help.
    I wish I bought sooner than I did but hey, don't we all?!

    • Drakesy on 05/09/2022 - 17:26

      I don't wish i bought property in 2021.
      Going to be in a world of hurt very shortly

  • screensaver on 11/09/2022 - 09:26
    -3

    I saw a unit in a windpw for 295000 yesterday, in sydney. I was in a hurry so did not read further

Login or Join to leave a comment
Login Join