Buying their first property is a dream for almost anyone. Property ownership is considered a milestone that not everyone can have, so when you reach an opportunity where it’s really time to buy your first home, you don’t want to be impulsive about your decisions.
There are certainly a lot of things involved in home ownership and merely thinking about it can get you anxious and confused. However, here are some considerations before buying your first property to help you out:
- Find a reliable realtor.
Whether you use realtors, agents, or brokers, you know that these people make a cut from the sales of the property you’re going to buy. It’s crucial to find someone reliable because this person will help you with many aspects from negotiating the price, home inspections, to closing the deal.
You want to make sure that you get a realtor who actually cares about your needs rather than someone merely focused on selling. You can use Best-Real-Estate-Directory as an additional resource.
- Carefully consider the location.
There’s no doubt that you want to be able to find the best places to live, and choosing the area of your first property is very crucial. Your location will determine how much you’re going to spend or save as you spend the next 10-20 years in that area. At the same time, researching will help you decide analytically as opposed to basing on your likes and dislikes. Carefully asses the location by thinking about these things:
- Market price forecast. What do statistics say about the possible real estate price of the area in the next 3-5 years? Will it be possible to sell or rent it out in the future to meet the returns you’re expecting? Check on recent statistics and projections from market monitors.
- Commute. In most instances, you will need to commute to your workplace from your home. If you have a significant other or family members, consider them too. Are you taking a bike, bus, train, or car? A poor property location can actually cost you a lot of money and time due to commuting in the long run. Determine what the options are from the property location to your work beforehand.
- Comparative Market Analysis (CMA). This is the value of the home being sold to you compared to others in the neighborhood. This can help you decide if you’re getting an old or new property, too. A CMA report from an unbiased realtor or agent will tell you a realistic value of the property.
- Traditional Neighborhood Development (TND). This is the development of the neighborhood using traditional town principles. A new school, park, hospital, or recreational area may increase the value of your home, but there might be plans that can cause you financial loss in the future. You can reach out to the town’s development department to ask about upcoming projects.
- Crime rates. Knowing the neighborhood’s crime rates are essential for your personal safety. Cities or towns with higher crime rates will add to more expensive insurance, even if your home won’t be a victim of burglary.
- Consider all things financial.
While owning a property is an investment, it is also a financial commitment. It would be a dream to own a home without a mortgage. However, it might not be for everyone. It’s important to refer to your current financial status, what you can afford, and what you can profit to ensure that you aren’t going to lose more than what you make. Here are some financial tips to consider:
- Calculate your expenses ahead of time. How much do you have and how much can you loan when you buy your first property? How much will it cost to renovate the house and what would be the projected utility costs? This will help you re-evaluate certain aspects you might not be able to afford and project your monthly expenses in the future.
- Clear your debts. If you still have student loans, car mortgage, medical bills, and the like, it’s best to pay them off before investing in a property so that you don’t carry a lot of debt.
- 20% down payment. While there can be lower deposit rates, 20% of the property cost will allow banks to trust you for a loan. Not having that amount ready will cause the bank to shell out a more substantial amount of money which will lead to higher interest or monthly rates.
- Emergency funds. It’s crucial that you don’t spend your last cent to the property down payment or the initial stages of the home. There could be unforeseen circumstances that cash will be needed, so you want to make sure you still have something in your pockets.
Real estate investing in Texas isn’t something that you want to do blindly or with your eyes closed. You need to do your homework even before you purchase a property. If you think that you aren’t ready yet, it’s okay to hold off. If you believe that this is definitely the chance you have, don’t forget to work with trusted partners and consider the things we have on this article.