Top Tips for Buying Property in Brisbane
Whether you are looking at buying property in Brisbane as your first residential home or your first investment property, there are several things to consider so you stay on track and make the right purchase for your needs and budget.
1. Staying Within Your Budget
One of the first things you should do is establish your budget. Costs include more than just the price of a property. You will also need a deposit, inspection fees, closing costs, moving costs, and other miscellaneous fees involved in the buying process.
Once you know how much house you can afford, shopping is much easier and faster since you will not be wasting time looking at properties that are outside your budget.
2. Budget for Any Hidden Costs
Buying property in Brisbane has some hidden costs that may include any or all of the following, and these expenses are above and beyond what you will pay for the property itself.
- Inspection and land survey fees
- Stamp duty
- Title searches
- Broker fees
- Application fees
- Valuation and settlement costs
- Maintenance fees
If you are purchasing an investment property, you also want to make sure you include property management fees and enough to cover your mortgage in case tenants are late with their rent payments.
3. The Amount of Your Deposit
Shop around for mortgage lenders that will allow you to have an 8-10% deposit. Of course, if you have more saved that you can put down on the property, it will lower the amount you have to mortgage.
You may even find lenders that will work with deposits as low as 5%, however, they may impose Lenders Mortgage Insurance fees so you need to budget for that also.
4. Keep Your Emotions in Check
Many first time homebuyers get a bit too emotional when shopping for their first home, especially when they find what seems like the perfect house. Do not be over excited while walking through the property.
When buying property in Brisbane, some real estate agents may try to take advantage of your enthusiasm and attempt to negotiate a higher price for the property since they do work for the seller, not for you.
5. Understand the Role of the Real Estate Agent
Smart shoppers know that the agent's job is to work for the seller to get as much for the property as possible. You need to keep your negotiator's hat on when working with agents. You both want the best deal, but keep in mind that the real estate agent in Brisbane represents the seller.
The agent should also be able to answer these critical questions to help you decide if you want to purchase the property:
- Why are the current owners selling the property?
- How long has it been on the market?
- What was the original selling price?
- Are the sellers motivated enough to negotiate the price?
6. Understand a Mortgage Pre-Approval
Before you schedule a meeting with an agent to see some properties, it is best to have a mortgage pre-approval from a lender. Some agents may not schedule a showing with you unless you can produce that paperwork.
Once you have your pre-approval, it assures the agent that you can put a deposit on the property as soon as you find the right deal.
7. Practice Patience and Shop Around
For most people, whether first time homebuyers or first time investors, buying property in Brisbane, especially finding the right property, takes time. Sometimes you might lose the deal on a property if another buyer comes in with a better offer.
Other times you may be looking at properties all day and not find what you are looking for. It is during these times that some people simply run out of patience and jump on the next property they see.
If you are feeling frustrated, it is best to take a break from house hunting and rest up. Desperate buyers jump into a home because they were impatient and suffer buyer's remorse down the road when the right property comes along a month later.
8. Don't Forget the Property Inspection
Once you find the ideal property that fits your needs, be sure to have it thoroughly inspected before going to settlement. Some faults may not be visible at first but will show up during an inspection.
Some of the things that you may not be able to see include problems with the foundation, faulty or old wiring, termites or other pest infestations or problems in the heat heating or air condition systems.
Inspections will cost some extra money, but the time and headaches they will save you later is well worth the expense.
Additional Tips for Buying Investment Property
If you are looking at buying your first investment property, there are some additional considerations to help you realize higher returns on your investment.
Know the neighbourhood. Supply of properties relative to the demand of potential tenants varies in different parts of Brisbane. You want to ensure that when your property is ready to lease out, there will be tenants available who can pay the rent.
You want to avoid the potential of having to sell your property at a loss because of high periods of vacancy.
Get familiar with property types. Are single-family houses in demand in certain neighbourhoods but not in others? You need to familiarize yourself with the area's housing needs before settling on a property.
Know the current housing and rental prices. If you know what housing types are selling, the areas where they are selling and the average selling price, you will avoid overpaying for an investment property. If you pay too much, you may not be able to charge enough rent to cover expenses, which makes for a bad investment.
In addition to the cost of buying the property, you may also want to include in your budget property manager fees. Position One Property are top Brisbane property managers that you can speak with about managing your property. Give us a call today!