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Voiceover: This podcast is for education and entertainment purposes. It's not financial advice and doesn't take into account your objectives, financial situation or needs. You should consider if the information in this podcast is appropriate for you and contact a professional financial adviser. If you are seeking financial advice.
Alan: Hello and welcome back to the Health Professionals Bank Bringing It Home podcast series, where we take you through the home buying process step by step from getting home loan ready to the home loan application process right through the sale and settlement.
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Alan: I'm Alan from the Health Professionals Bank. And joining me again today is Financial wellness and certified money coach Betsy. Betty's greatest wish is that every Australian enjoys financial well-being. Across her extensive career in financial services, she has helped hundreds of people to realise their dream of becoming homeowners and investors. Hello and welcome back, Betsy. Great to see you again.
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Betsy: Hi, Alan. Good to be here.
Alan: Well, today we're on the hunt. It's time to start looking for a property. But before we get started, we'd like to acknowledge the traditional custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to the elders past and present, and extend that respect to all Aboriginal and Torres Strait Islander peoples.
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Alan: Well, we've arrived at the pointy end, but see, we've done all the hard work and this is probably one of the most exciting stages of the home buying process, searching for that property. It sure is. We're going shopping. Something I'm good at, but there's more to it than meets the eye when it comes to finding the right property, isn't it?
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Betsy: Yes, that's right. There's a lot to consider. And before you get your heart set on any particular home and drop a lot of money, it's really important to understand what you want and what you need in a property so you can make sure you're searching for the right property for you.
Alan: Alright, that's a really good place to start.
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Alan: So how can our listeners go about working out that? What do they need and what they what they need and what they want in the property?
Alan: Yeah, I mean, the things we need to focus on now once needs goals and let's not forget our budget either. So are you really clear about the sort of property you want? Have you weighed up your needs now?
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Alan: But also into the future? One of the most important things to consider before you start your property search is your budget. How much you have for deposit, how much you can borrow, or already have pre-approved, and what that means for the size, location and property type that you consider. This will help narrow down your search and make sure you're not looking at properties outside your price range.
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Alan: And that's the unfortunate thing, right? It's nice to dream, but we also need to be realistic when it comes to finding that right property. So budget is a big one. What else might our listeners want to think about?
Betsy: Well, they might want to consider things like location, the number of bedrooms that they need now, but also in the future what transport options and local amenities, amenities to provide mobile coverage, traffic noise and weighing up the pros and cons of, say, buying a unit versus buying a house.
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Betsy: As a health professional, it might be important to you to be close to work, especially if you're on call or working night shifts or regular hours. But you'll have to weigh up the convenience against property prices in the area that you're looking at, taking into account how much you'd need to borrow and what your loan repayments are likely to be.
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Alan: But you just touched on a unit versus a house and many of our listeners will be weighing up the difference between the two. What should they know about the difference when it comes to buying?
Betsy: Okay, so when you buy a house, you're buying the building and the land that it's on, it's usually a freehold title and sometimes it's called a Torrens title and you're the sole owner of that property.
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Betsy: Whereas if you buy an apartment or a home unit or a townhouse, you own the individual part of the building that's called the lot, but you actually share the ownership of the land that the property is on. So because of this, you'll have to pay a strata title or you'll have a strata title, should I say, and you'll have to pay regular strata or body corporate fees for the upkeep of the building and common areas.
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Alan: And those fees, they can vary depending on a range of factors, can't they?
Betsy: Absolutely. Strata or body corporate rates may vary depending on what facilities are on offer. So does your building have a gym or a pool, for example? And then the maintenance and the upkeep required, as well as how many. Lots and apartment owners are sharing the costs.
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Betsy: So it really pays to do your research and due diligence on any property, whether it's a unit or a house, just to make sure that there will be no nasty surprises down the line. So to do this, you'll need to get a building report done by a qualified inspector. This is especially important with older properties, with apartments. You want a strata inspection report that basically tells you how well that strata company is being run.
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Betsy: So, for example, you look at how much is the sinking fund, and for just a bunch, a little jargon, a sinking fund is set up for large unexpected repairs or renovations for the property in the building. The report should also cover, if there are any major expenses coming out that may attract a special levy payment from the owners.
Alan: Some of our listeners, they'll be weighing up other buying options, things like whether to buy a new or existing property or even buying off the plan.
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Alan: Can you talk us through some of the things that they'll need to consider?
Betsy: So if you're looking at buying a new property, either buying off the plan or something that's newly built, these will come with a certain guarantees from the builder. So, for example, house and land packages and buying off the plan, there's some things that you might want to be aware of, like checking that the specs match the marketing material and what you are hoping or expecting to buy.
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Betsy: Finding out will your lender allow you to borrow for the size and type of property that you're looking to purchase? You should make sure your plans include the fact that it might be a couple of years before you actually get your keys to the property and what the value of the property and the interest rates might be and how that might change before then.
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Betsy: And of course, never sign anything until a lawyer, specifically a conveyancer, has had a look at it and a look at the contract.
Betsy: That's really good advice. But existing or older properties, they can come with their own red flags as well.
Betsy: Yes, they can. So, for example, existing or particularly older properties, they might have more maintenance in the short term.
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Betsy: So this is where the importance of building and pest inspections come into play. So look out for properties that have been on the market for a long time. And if you if you notice that maybe do a little digging into as to why, what have they been on the market so long. We touched on this earlier, but if you're looking to buy an existing unit, it's again really important to look at that strata or body corporate fees and do your due diligence on the body corporate financials to make sure there is a healthy sinking fund and be aware if there's any major buildings or maintenance works coming up by checking the minutes from the Strata meetings.
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Betsy: Things to look at indoors include How are the conditions of fittings? What's the electrical wiring and plumbing like? Is there enough room for your appliances like dryers, dishwashers? What's the condition of the kitchen or the bathroom? Is it is it livable this design? Are there enough bedrooms? Is there enough living space for your other needs? These are really important things to ask yourself why you're looking around at the things that you might want to think about too.
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Alan: Is what the privacy like. Are there gardens? Does it meet your needs if you have kids or if you've got any pets? What's the condition of the outdoor paving fences? Garage paintwork? I know this is getting to be a long list, isn't here, but is there room to extend if you wanted to in the future? Happily, there is a great property inspection checklist on our website that you can download and take with you when you inspect properties, and that will really help you too.
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Alan: Now, Betsy, the one thing we haven't touched on yet is probably the most important part. As the saying goes, location, location, location.
Betsy: That's right. When it comes to location, it's important to think about your needs. Now, but also into the future, because you're likely going to be spending at least a number of years here, perhaps perhaps even decades.
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Alan: That's a really good point, because, you know, we need to have an eye on the future because our laws probably will look slightly different in five or ten years from now.
Betsy: Yeah, spot on. And a question for our listeners. What are some of the things that matter to you that might weigh in to where you want to live?
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Betsy: So maybe you're looking at areas that are closer to work with great restaurants and entertainment options nearby, or perhaps being close to great schools, lovely green space or your friends network. Our top consideration. There's no one size fits all. It's just what matters to you. So when I'm thinking about location, a couple of things that I sort of work my way through and consider was the proximity to schools and work, especially if you're working long or irregular hours.
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Betsy: What's the proximity to the things that matter to you? So maybe it's family support and your friends network or public transport, green space, nightlife, restaurants and cafes, doctors, hospitals. What's sort of the trends in the area when you think about the property prices and what's the growth like? Does it have some good sunlight? We all we all need that Vitamin D.
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Betsy: Are there any risks of things like natural disasters like flooding or bushfire risks as they're likely to be any development and development approvals nearby that might affect the way that you enjoy your residence? Is there any potential for the area to be rezoning that might impact on the liveability? And of course those amenities like childcare, parks, sporting facilities and don't forget to find out what you can about your neighbours because you could be living next door to them for a long time.
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Betsy: So what's the local demographic and what's the privacy like in the home? Now, the best way to check out your potential home location is to go there at different times of the day. So when I was looking to buy my house, we did a drive by in the morning, during the afternoon and also at night as well.
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Betsy: And also something else you might do is if you're thinking about living that test, how long does it take you to get to work, whether it's peak hour or school day or other places that you might frequent as well? And then, of course, go to open homes for different properties in the area to really get a good feel for whether it's where you want to live.
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Alan: So do your research and get ready for some driving, I think. I think so. Let me hit you with a tricky one here. Like, like many of our listeners might relate to this. Look, I want to live in a suburb that I really love. I want to be close to work. I want to be close to family and friends.
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Alan: But the house prices that are just out of reach, they're just out of my budget or they just leave me with very little wiggle room when it comes to the mortgage repayments.
Betsy: Yeah. So this is where the concept of rent vesting might come in and you might have sort of heard this term being bandied about. So reinvesting is a strategy that could help you get in to the market sooner, especially if you live and work in like a high priced area.
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Betsy: You rent where you want to live, but then you buy where you can afford. Okay, so let's say you work at an inner city hospital and it makes sense for you to live close, to work with long hours and shift work. You don't want to have a long commute on top of a really busy day, but buying a property in the inner city might be pretty unaffordable.
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Betsy: So with reinvesting, you could look at renting there instead and then buying in a more affordable suburb or even a regional area and then renting out that property to help cover the mortgage. It could be one way that you could get into the market sooner.
Alan: So if you're thinking about or you intend to rent first, that's something you need to talk to your lender about.
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Alan: Make them aware of.
Betsy: Exactly because you won't be an owner occupier, meaning you're not planning to live in the home that you're buying. So you'll need to apply for an investment. Loan Interest rate are typically higher on home loans that are for investment properties. And also you won't be eligible for government first home buyers. Owner Occupier Assistance Schemes Grants and exemptions.
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Betsy: So it's really important to speak to a home loan or lending specialist to help you work through all your different options and consider any costs that might be involved.
Alan: That's some good advice, Betsy. Look, this episode has flown by and we're almost out of time, so let's finish up with your top tips when it comes to finding the right property.
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Betsy: Okay. My top tips would say take someone with you. It's always helpful to have a second eye and second opinion when you're looking at a property once you've requested permission from the real estate agent. Take lots of photos that you can refer back to, but you don't actually get a lot of time on these inspections. So having photos to look back on can be helpful and make sure you explore the local area so you know where the closest schools, shops, cafes, etc. are.
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Betsy: Don't rush through the property, like take as much of that allocated time as you need. You're making a pretty big decision. So take your time, take with you and prepare a list of questions ahead for the viewing and then add to the list as you make your way through the property. And of course, download a copy of the property inspection checklist from our website because you can take that with you too.
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Alan: As always, that's great stuff. Betsy, thanks so much again. Thank you. It's been a pleasure. And thank you listeners for joining us, too. We hope you enjoyed today's episode on finding the right property for you. Stay tuned for episode seven, The final episode of our Bringing It Home series with Betsy takes us through the home buying process from making an offer to home sweet home.
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Alan: And remember, if you have any questions about the home buying process or just want to speak with one of our lending specialists, please give us a call. We'll make a booking on our website to speak with a lending specialist at a time and a place that suits you, including after hours at your place of work, at home or via video.
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Alan: And as always, catch you next time.
END OF EPISODE
