Buying your first home...Where the F#@$ do you start?

It’s a bit of a chicken and the egg situation. Do you look at properties first, understand where you want to live/invest or do you go and speak to the bank/broker? 

I can see this working from both view points. 

Starting with Search 

Now you might be renting or living at the rents, so the “easy” thing to do is go  check out properties and open homes in that area. 

Depending on the area, properties could come in all shapes and sizes. Houses on full blocks, duel occ., units/villas, townhouses and apartments. 

If you grow up in your home, and your parents have been there for quite some time, houses in that area may seem expensive. So if there is a mix of property types above, you might need to select something other than a house to stay in the area. 

The other option is to see what you money can buy you in other areas. Now no doubt, if you have lived in a city your whole life, then you know some other spots around town. 

Could you see yourself living here? Does it have more going for it, at a cheaper price point? 

If you do figure out that you like an area, and the properties with in it, you can start to see how live would look living here. 

This is the point I like about doing it this way, you start to create motivation and a want to live there. So the next step is to go and see how feasible this is with a bank/broker. 

Start with Finance  

This is the practical way, and if you work a simple 9-5 with payslips and life is quite simple then you can get a pre-approval quite quickly. You can also use tools like online borrowing capacity calculators to get a rough idea (you can do this for option one too). 

If life isn’t as simple, you have hecs debt, you work a few jobs, you are self employed, haven’t done a tax return in a while, then getting an idea of what your budget is could take a little bit of time. 

And at this point, it’s when people start to drop off because of the too hard basket. I get it, you go and sit down with a broker, which is super daunting, they ask you for a bunch of info and to upload your life to a portal. 

If you don’t have those docs, you have to go and get them which can take time if you are waiting on others like accountants. 

Let’s fast forward, and assume you haven’t seen any properties yet, the broker comes back and says you can borrow $350k which isn’t going to buy much in today’s world. But if you keep saving or if you could get a guarantor from your parents your borrowing capacity could go to $600k which is enough to buy a good property. 

If you haven’t been out there looking at property to understand what your money buys you, you could lose all motivation and stop with the search all together. 

How many people do you know that saved money in covid ready to buy, and then decided to go on a Eurotrip? All good if you fall in this camp too, you can always start again. 

Final thoughts

But the moral of the story is, it’s BLOODY tough buying your first property, and sometimes you need inspiration to drive you forward. You need those visions of what life could like to push through the hard times and get to where you want to go. 

That’s what this newsletter (and future community) is all about! I want to support those going through this pain, and show them that it is possible. 

If you found this valuable, share it with a friend or family member. It’ll go a long way to support this newsletter so we can grow and become stronger in supporting you guys. 

Club Captain
James Rankin