Tips for Home Buyers with a Tiny Budget
March 4, 2019 / Written by Rich Harvey
Australia is home to some of the most expensive real estate in the world, and unfortunately, this can make house hunting depressing rather than an exciting prospect. For many, their budget just doesn’t seem to stretch far enough and their expectations have had to be adjusted, and adjusted again.
If that sounds like you, don’t lose hope. With the right technique and process you can still find a home you love. Here’s some advice to get you started.
Look in Fringe Suburbs:
The suburbs next door to popular areas are cheaper, but they almost invariably appreciate very significantly over time. Neighbouring areas will share many of the same features as the popular suburb, and are often only a short distance away, making it only a matter of time until the demand increases in these areas as well.
Buying in these areas will save you money, and likely make solid long term investments.
Broaden Your Search:
Buyers can often save if they consider homes for sale by owner, foreclosures, short sales and homes offered for purchase through land contracts. It may require more legwork on the buyer’s behalf, but the potential benefits are significant.
Mortgagee sales can also be lucky finds. These homes are usually vacant and available for immediate possession at the closing, but, of course, be sure to have home inspected before you purchase.
Rather than trying to buy the perfect property on a limited budget, consider buying a smaller property to just get your foot on the property ladder.
Consider a unit or townhouse if your budget won't stretch to a stand alone house. Look for a property where you can add value via renovations to increase your equity.
Leverage Your Equity:
In a nutshell, equity is the difference between the value of an existing property and the amount of your remaining loan against it. If you have it, using equity to buy a new home shouldn’t be overlooked.
Leveraging your existing equity, you can get into the market today and buy at today’s prices, and then benefit from the coming years’ growth. If you do have it, it’s certainly worth considering.
Ask for professional help:
Hiring professional help may sound like an unwise expense on a small budget. However, when budgets are small is often when you need it most.
With a small budget you may have more competition and you’re going to have to look harder and in more areas. You’re also going to need to be a stronger negotiator, know when to hold back and when to bid, and are potentially going to have to take a risk to get a good deal or investment.
This being the case, having the right professional in your corner is going to offset the cost of hiring them.
They’ll be able to help you find the best deal and will also offer valuable advice when it come to things like resale potential, suburb development, risk, auction bidding and may be able to give you access to properties you wouldn't ordinarily find online.
House hunting can be a difficult process on a small budget, but it certainly doesn’t have to be depressing or impossible.
If you educate yourself, keep trying and are prepared to ask for help, you may just find that you end up with the type of home you’d begun to believe was out of reach.