Today’s market for first home buyers is so competitive. Week in, week out first home buyers are leaving auctions and negotiations with a mix of angry and sad emotions as they miss out on their dream home due to budget limitations. It’s a demanding process and definitely leaves a sour taste in people’s mouths, it’s also a time when people make their biggest financial mistake, as it is very easy to get caught up in the moment and overcapitalise on a purchase just to get in.
It’s great if you can buy in and get your dream home, though the only problem is once you take on a mortgage without any assistance other than your current source of income, it leaves to a very risky future. If the market corrects and prices plummet and in amongst everyone else who has fallen into financial distress, you find yourself in the same boat, it could lead to some very expensive lessons if you’re forced to sell at a loss.
Now, if you were to put your first home on hold for the time being and focused your energy on purchasing an investment property first, there’s a few things that you’ll find in this area of the market. Firstly, there is a lot less emotional competition. This means that if the numbers don’t stack up, then you move onto the next until you find the right return for you.
The competition in general is a lot less and the odds of winning a property become lot greater than in the owner occupier sector. But the biggest thing to bear in mind is that you will have assistance in your repayments, an asset which will have capital growth and in the future, equity to draw against to buy more properties or to go towards your family home. It also helps to have an open line of credit with the banks when you are looking at expanding your portfolio.
I get that the first home buyers grant holds plenty of incentive, though buying solely because of that in either, areas that have a higher risk of major losses in a down market or getting a shoebox that you’ll grow out of in less than a year, it seems more feasible to take a business approach and start to build yourself an income for the future.