Show notes – Top 10 tips for first time buyers and investors – How to get it right first time (Ep.152)


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In this week’s episode, Dave, Cate and Pete take you through:

1. Educate yourself

  • Webinars that you can join in on, listening to podcasts, seminars. Plenty of articles on property – but you want to know who is writing it and check out their credibility. Are they spruiking, is it a marketing tool or are they really trying to educate people. Books. More time and money, there are simple courses that can be done or go to your local Tafe. 
  • Get a community facebook group – sometimes the tips are not that fantastic, you can glean a lot from that.  
  • Good relationship with a firm that do put out some good information – newsletter, feed. Great free education. Trusted advisors – it allows you to become informed so you’re able to make decisions that are right for you

2. Mix with like-minded people

  • Avoiding property discussion with non-likeminded people. They can unravel your strategy or plant seeds of doubt. But someone who is a friend looking from the outside in could have some really good questions for you. 
  • Exchange ideas and get confirmation that what you’re thinking and doing is correct.  
  • Mindset in life drives most of the outcomes in life. If you’re with likeminded people you’re spending time with people who have a similar mindset, more likely to make decisions that are aligned with your mindset. Don’t want to be around people who can drag you down or make you delay decisions. Inaction could be worse than taking action that is half-good in property.  
  • Taking what people say with a grain of salt if they’re potentially steering you in the wrong direction with their own personal biases.

3. Set your goals

  • Tip 1. Visualise your goals 
  • Tip 2. Ruthlessly eliminate your goals / keep it simple 
  • Tip 3. Set your goals for the now – short to middle term, otherwise it will seem too hard to achieve. Set long-term goals, but figure out what you can do in the short to middle term to work towardsthem.  
  • Tip 4. Create SMART Goals 
    • Specific (simple, sensible, significant). 
    • Measurable (meaningful, motivating). 
    • Achievable (agreed, attainable). Breaking your goals down into achievable steps are critical, or you may be overwhelmed and give up. 
    • Relevant (reasonable, realistic and resourced, results-based). 
    • Time bound (time-based, time limited, time/cost limited, timely, time-sensitive). 
  • Tip 5. Write your goals down 
  • Tip 6. Share your goals 
  • Tip 7. Create an action plan (or property plan) and timeline 
  • Tip 8. Take action – more powerful than just about anything else.  
  • Tip 9. Re-evaluate and assess your progress 
  • Tip 10. Set for goals for different parts and time of life

4. Select where and what to buy

  • First home buyers – it’s really important. If you don’t buy in the right location and type of property, it may be your forever home because it hasn’t kept up with the market and you’re not able to get ahead.  
  • Investors – you need to get the location right. Proximity to the CBD, amenities or bodies of water.  
  • What to buy – buying houses or units and buying character or period property.  
  • Think how this first property will impact your longer-term plans – first property can set you up financially and create equity needed to leap frog into future homes or investments, so really thinking about this is critical.  
  • Will it be an investment or lifestyle purchase – get clarity around that.  
  • If you have reasonable confidence where you might live in the longer term, try and buy in and around that location so you can keep pace with the location.

5. Visit your areas and do your research

  • If you’re going to buy a property, you should visit the area – drive around, ride a bike or even walk around.  
  • Here what’s happening in the neighbourhood, talk to the locals. What’s happening in the area and what’s planned to happen.  
  • ABS, CoreLogic, SQM and Crime statistics.

6. Find out how much you can borrow & if there is any assistance

  • What’s most important is figuring out your own budget, your existing cash flow and what you would like after the purchase for a cash flow buffer and surplus cash flow.  
  • People often compromise on their property strategy to go with a lender that has a lower interest rate.  
  • What’s more important – the property you buy or the lender? 
  • If there is a mainstream lender that won’t lend you what you can afford, then ask if there are other lenders that may lend you more.  
  • If it’s going to cost you getting into a home that is suitable for longer, you might end up getting a big bill because you have to sell that home sooner.  
  • Arguing over interest rates is not the most important factor.  
  • It would be unusual for someone in a bank to talk to you about the various government assistance schemes available A good mortgage broker will know where the opportunities are and what lenders and the wait lists and the eligibility criteria.

7. Save money for a deposit, consider shared equity, joint ownership

  • Labor government home owner assistance scheme – you only need a 2% deposit, it doesn’t have to be a new home – which forces people out on the perimeter or really small apartments in the city.  
  • Joint ownership – that’s one way that parents can help out their kids – go as tenants in common, rather than joint tenants.  
  • The earlier you set up an effective money management system, that interacts with your mortgage through the use of offset accounts, the better.  
  • A lot of first time buyers think it’s not that difficult to manage their money well – yet to have kids, not married yet, don’t have a mortgage or multiple mortgages yet. It is a bit simpler because there are less moving pieces.  
  • When you get a partner, make sure it’s working together smoothly prior to having kids.

8. Crunch the numbers

  • Investment – rental yields and outgoings 
  • First home – what are the outgoings associated with the property – particularly if it’s a strata group, owners corp or body corporate.  
  • The bank or lenders will look at the last 3 months of saving and spending activity – cancel netflix, gym membership, uber eats and everything.  
  • For investment purposes – income, rental income, tax depreciation, property management fees, property maintenance.  
  • Find out what’s going to make you look good from your strategic mortgage broker to the banks.

9. Get professional advice

  • Chat to a strategic mortgage broker and getting a good legal representative.  
  • Seek independent advice, specialists, work out what it is that you want support and guidance around.  
  • Big believer in being really good at what it is you do for a living and getting help at the things that you’re not an expert at.  
  • If it’s free, you have to ask some questions.  
  • QPIA – look for someone who is a qualified investment advisor.  
  • You’re spending a lot of money on property, if you have to spend a few hundred on a lawyer or accountant, then so be it. You need to get it right.

10. Just do it

  • Easy to say, but hard to do.  
  • Procrastination and looking for perfection, there is no perfect time or perfect property. Focus on your criteria of must haves and nice to haves and just do it. 

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