Almost every one of us have a dream home we would love to buy someday, especially when the rent we pay every month is going towards funding someone else’s bond. However, there a few questions we need to ask ourselves before we jump into bed with the bank for the next 20 to 30 years. The most important is whether to purchase or stick with property rental…
Can I Afford This?
Over 50% of buyers in the property market have never owned a home before, and being a first time home buyer is an exciting but precarious place to be. Without the previous ownership of a home to fund the purchase of another, invariably most first time buyers will look to the bank for a loan.
Loans are generally a good thing but you need to be very careful when tying yourself to one. Take a long, good look at your finances, weighing all your expenses, before signing on the dotted line.
What am I Buying?
Getting a foot in the property door has always been touted as one of the best investments around. Is it? The first question you need to ask yourself is why. Why am I buying this property? If it’s purely as an investment to gain extra income through rental, then it needs to not only pay for itself but be able to appreciate with time.
If you’re buying to live there – does this home cover all my needs, now and in the not too distant future?
Looking ahead slightly will help you decide whether or not choosing this home is the right choice for you. It might be worthwhile spending slightly more and getting a bigger place, with the option of generating some rental income while you live there. This works in the other direction as well – am I buying too much house? There is often a misconception that buying a bigger house now will solve problems in the future, instead it ends up causing serious financial strain and can lead to foreclosure.
[blockquote]There are a multitude of options out there when considering whether to rent or buy a home. Doing the correct research and talking to the right people is a sure way to get the most out of any property deal.[/blockquote]
Renting TO Buy?
Here’s where things get interesting. There is in fact a way to rent AND buy your home at the same time. This process is aimed at certain individuals who want to buy a home but have struggled with the loan application process. In this case the only point that matters is if you can afford the monthly payments – something that is determined on your current financial state through a comprehensive audit process.
Now your monthly rent is working towards owning something, rather than just going into someone else’s pocket.
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