For first-time property buyers and real estate investors alike, buying a home can be a long and complicated process! If you’re located in the UK, the reputable pros at Dream Move Relocation can help you find land for investing or building property. What else can you do to find the right home? Both investors and first-time buyers can benefit from following these tips.
Financial Tasks
Whether you’re a first-time homebuyer or investment buyer, you’ll need to determine what you can spend before you begin searching for properties. According to Money Under 30, first-time buyers should aim to purchase a home where their monthly mortgage payments will be less than 28 percent of their gross monthly income. Investment buyers will have to consider their potential return on investment in a particular area to come up with a reasonable figure.
Unless you plan to buy in cash, your next step is applying for a mortgage! Buyers can research a variety of available choices to find the right fit. For instance, many property investors will choose to apply for variable rate home loans, which come with more flexibility than other loan types. Other options include fixed rate and flexible, the latter of which combines both variable and fixed components.
You’ll also want to determine how much mortgage you can actually afford. A few factors must be applied, such as the size of the down payment, your credit score (which affects the interest rate and loan terms), your income, and the length of time to pay off the loan. Using an online mortgage calculator is a convenient and quick way to crunch the numbers.
Where to Buy?
As a first-time buyer, you might be trying to find an area with good local schools, pet-friendly parks, walkable communities, reliable public transport, or other factors. If you’re an investor, your priorities might be a little different! Research locations where local industries are growing and attracting job seekers, causing the population to increase and spur higher demands for rentals.
If you’re buying during a recession, prices in markets that were previously too expensive for you may be dropping slightly. However, this does not mean these areas won’t still be desirable in the future. Feel free to look around at attractive neighbourhoods where prices are beginning to decline!
Buying a Home “As Is”
During a recession, you will likely come across many foreclosures and “fixer uppers” on the market. Purchasing a home like this can be significantly cheaper than you expected, making it a particularly enticing option for investors — but is it worth the risks?
It’s important to fully understand what you’re agreeing to when you buy a home “as is.” You will be the one responsible for addressing structural issues, a leaking roof, mildew and mould, and even pest infestations, not the seller. If you’re tempted by the foreclosed homes and properties that need a little TLC appearing on the market in the midst of a recession, make sure to factor in the cost of repairs and re-modeling. And if you’ll be moving in, you’ll also need to account for temporary, alternative accommodations.
Perhaps you’re excited to get the keys to your first home or welcome your first tenants to your new rental. Either way, it pays to be an informed home buyer! With these tips, you’ll be well-prepared to purchase a residential or investment property.
