Whether buying somewhere to call home or investing in property, there are many benefits and advantages to buying real estate. Property markets almost always go up over time, making this one of the best and securest long-term investments you can make. Additionally, you can generate a solid passive income through rental returns on an investment property as long as you make the right choice.
However, for new property owners, there are certain surprises and pitfalls, some positive and others not so much, which could blindside you. As much talk as there is about owning your own home, investing in property and so on, there are certain realities that no one ever seems to mention.
So we’re here to speak the truth, and reveal the key things about owning a property which no one ever tells you.
- Make a budget for maintenance. Then double it.
Ok so it may not be necessary to double it, but the truth is that maintenance and repairs on your property are bound to be more than you anticipate. One of the realities of owning a property, whether one that you live in or one you rent out is that you are responsible for repairing anything which breaks in a timely manner, and things break often. You may need to replace the hot water service, for example, or deal with plumbing and electrical faults.
Additionally as part of normal wear and tear, parts of your property need to be replaced from time to time, which can range from something small like a light switch to major investments such as the roof. There may be some changes which, although not a strict necessity, will improve your décor and ambience, such as upgrading the lighting.
Therefore good advice is to calculate a budget for maintenance and then add some extra. This budget should be part of your calculations when deciding how much you can afford, and you should be sure to put this amount aside so that you have it available and are not in a fix when something major breaks down.
- There is a mind-field of laws and regulations to navigate
Buying home is no easy task. It involves a myriad of legal documents and processes, not to mention a whole other language of real estate terminology. After all, buying a property is something which most people don’t do very often, so it is understandable that you will not be on top of all relevant legislation. Therefore, consulting with the right experts is a must: you should hire a professional real estate agent, as well as consulting with an accountant or financial planner and a mortgage broker. If you will be buying an investment property and renting it out, it is also important to have a reliable property manager.
If buying a property overseas, these requirements become even more complex, and you need to consider not only the local property laws but also how they apply to foreign nationals. There are some great investment opportunities to be found in foreign markets, for example in Dubai. Buying an apartment or villa in the UAE can be a great investment, as long as you understand the legal steps for buying a property in Dubai. In these situations it is important to hire a local real estate agent or lawyer who specialises in property acquisition by foreign nationals.
- Be prepared before you start house hunting
Before anything else, make sure you are prepared before you start seriously house hunting. There are certain steps you need to take to prepare before you start looking at houses and putting in offers, so plan ahead and have all of this in order before launching into your search.
There’s nothing worse than finding the perfect home and missing out because you don’t have all your ducks in a row yet. Make sure you have your mortgage pre-approved, and have investigated insurance and other important administration. Do thorough research, including deciding which neighbourhood you want to buy into. This will also make your bid more attractive to sellers, and if it comes down to them deciding between your bid and another similar offer, they are more likely to select the one which already has a mortgage pre-approved.
- There’s never a “right” time to buy
One of the great myths in property is that there is a “right” or “wrong” time to buy. You’ve probably heard advice in the past to not buy now, as the market will go down, or not go up for a while, so it is the “wrong” time to buy. Yes, real estate trends are important and you should certainly do your research into the best markets and the best opportunities from an investment perspective.
However, the truth is there’s never a “right” time to buy. You could miss out on the perfect place for you because you are waiting to see what interest rates and the property market will do. You will probably also be bombarded with “helpful” opinions from friends and family members. Although well intended, this can sometimes make it harder for you to focus on a big decision. In the end, the most important opinion is yours, as the future owner!