Here is part two of our three-part guide to buying the right investment property. Read on for more great tips on how to buy a great home.
1. Government Assistance and Stamp Duty
The Australian Government supply a fund called First Home Owner’s Grant. This financial support program is intended to help bolster the finances of investors who are new to property investment. Though this aid generally applies to first time buyers only, you can check whether you are eligible for exceptions. It also can vary from state to state, so make sure that you’re on top of what’s going on in the various areas and figure out what’s going to be best for you.
This home-owners grant can be used to soften the blow of the down payment or be used to help keep your bank account healthy during the process of payment. The amount given by this grant varies on your position as a property buyer, and usually depends on the kind of property you buy and where you buy it. You can use a tool online to calculate the amount that you get.
These calculators can be easily found online and it’s beneficial for you to jump online and have a look and find out what’s going to be the best financial choice for you and how you can manage your position to maximise your advantage financially.
The other factor to consider is Stamp Duty. In Australia, Stamp Duty refers to the price for transferring property from one holder to another. This can make up a large portion of up front prices and should be taken into account for every single budget revolving around buying the right property for you. The exact cost changes from property to property and is based off a number of things.
Stamp duty can be huge or small, depending on what kind of property you buy and whether you’re a property investor or a home buyer looking to purchase. It can also vary depending on whether you live in the property or consider it a principle place of residence. Making sure you know what is what is very important at this stage, as it can mean the difference between a stamp duty of thousands, or a very small sum indeed.
2. Make a Budget then Stress It
After First Home Owner’s Grant has been considered, your financials looked at, Stamp Duty paid and a budget formed you will have a rough idea of what you will have to pay per month to start paying down your loan.
Now take that budget and increase the payments per month – because you want to be as economically sensible as possible! Taking the time to be sensible now is going to pay off in the future when your home loan is paid off sooner as well. Newcastle Permanent offer home loans, which are excellent for new home buyers.
The economy fluctuates in both directions every day and there is no telling when it may spiral or take off. You need to pad your budget in case interest rates begin to rise. There is nothing worse than calculating a razor sharp budget that will let you live as you want and pay off your bills quickly, only to have your payments rise by a few hundred dollars.
It’s much more sensible to make a budget and stick to it – and if you can you should try to create a buffer of sorts – which is basically just a lump sum of some money which you keep for an emergencies only kind of situation. You need to make sure that you have this handy in the event of lots of things going wrong at once – and make sure that you don’t use it in the event of a huge sample sale at your favorite store…