Is buying property during a pandemic something that you have been considering? With interest rates at a record low, and first home owner grants on offer for buyers entering the property market for the first time, 2020 could be the year for you to purchase a property. Here are three key things to consider when searching for your next property acquisition.
1) Be prepared for all financial situations
We are facing extremely uncertain times. The economy has taken a big hit during the first half of 2020, and this has directly impacted the national unemployment rate. Not only is Australia facing the biggest unemployment rate in decades, but approximately 760,000 businesses have applied for financial relief from the Government in the form of the Jobkeeper subsidy. This has helped to secure jobs during this volatile period, but it has also seen measures being adopted such as wage decreases and hours being cut back for employees to ensure their jobs continue to be sustainable. During COVID-19, with all of the uncertainty of what the future will hold, it is a wise idea to create a budget plan and stick to it. Before you enter into a sales contract or a bidding war with other interested parties, know exactly what your financial plans will be if there should be a change to your circumstances. Being prepared for all scenarios means you can go into your property purchase with confidence and a level head.
2) Do your research
Before jumping in and throwing down bids at your next neighbourhood auction – make sure you do your due diligence. Low interest rates have encouraged buyers to re-enter the property market, so you could find yourself in a bidding war quite easily with buyers out in droves, and a shortage of listings available on the market.
Know what your ceiling is for a property purchase and don’t let anything sway you to go above your maximum spend. More properties will come onto the market, so if you miss out on one, it wasn’t meant to be.
Make sure you look at recent sales in the area you are interested in to see what comparable properties have sold for. This will give you a reasonable framework to work with. Also check what’s happening in the rental market in that suburb and surrounding suburbs. Are there lots of vacant properties in that neighbourhood? Is that problematic for you if you are hoping to invest and rent this property out?
Do as much research as you can and attend lots of open homes to get a good look at what’s for sale. The property ads are designed to highlight the best features of a property – go and see them in person to gain a full understanding of what you can get within your price range.
3) Get a building and pest inspection
It is absolutely crucial to have a quality building and pest inspection conducted when purchasing a property. If you are purchasing at auction, you must have this done prior to auction day because once the hammer falls, that property is unconditionally sold to the highest bidder – and if that is you – well you’ll need to know exactly what you’ve bought.
If you are purchasing through a private treaty, you have the cooling off period available to you and this is the crucial time to get a quick and accurate building and pest inspection completed. A building and pest inspection will either give you the reassurance you need to move into your new home with confidence, or if necessary, the option to withdraw from the purchase of the property. While this might lose you your holding deposit, it could end up saving you tens of thousands of dollars on a money sink that needs extensive work done to bring it up to standard. A building and pest inspection is your security when buying a property – you won’t ever regret spending money on this during your property acquisition.