Tuesday, October 23, 2018

House

It's been a long time coming, but, finally, a change has come to the housing market... and it's good news for first-time buyers. 

New rules limiting lending to property investors at a time when the market has seen a surge in new apartments, has had a cooling effect and given a boost to those looking to take their first step on the housing ladder.

So if you've been thinking about taking the plunge to acquire your first home, now is a really good time to buy.

Here's a little advice to get you off on the right foot...

Be realistic
Compromise is the word that first comes to mind. It's a very romantic notion, buying your first home and people can get carried away with the 'dream' and find themselves coming down to earth with a significant bump when they realise what they can actually afford.

But look at this as exactly what it is - that all-important first step on the property ladder.

Location and lifestyle are key words when purchasing a home, but they must be flexible enough to bend to your budget. Set your sights at what you can afford from the beginning of your search, and you'll not be dissappointed. Your property will increase in value, you can add value to it with improvements and additions and soon enough you will be ready to trade up to something closer to your dream home.

Do the maths
There are lots of hidden costs to consider as you become a homeowner. On top of your mortgage repayments, you need to think about all the extra bill you'll face now that you're not renting (or living with family). Things like rates, utilities, insurance, maintenance costs, strata, higher transport costs, fluctuations in the mortgage rate. All of these things will have a negative impact on your finances, and must be factored into the affordability of your desired property.

Do your due diligence
Pest and building reports are expensive. The average house-hunter checks out five different buildings before making a purchase, so the costs can quickly mount up, but don't be tempted to skimp when a few hundred dollars spent on thoroughly vetting a property before an auction, could save you tears and tens of thousands of dollars in costly repairs down the line. Beware when real estate agents provide the building and pest reports - remember who is selling the property.

If you're buying an apartment on a strata title, it's imperative that you look into your rights and responsibilities, especially financially. A good conveyancer is worth their weight in gold, checking out complicated strata arrangements, previous or ongoing disputes, issues with the strata fund etc. 

Trust the experts
Of course your friends and family will have some valuable advice, but do trust the experts. Do your homework and find professional advisers who will be able to guide you at every step of your property-purchasing journey, from finance through to settlement. Quiz them on their credentials, get second opinions, ask for client testimonials and references - don't be afraid to shop around until you're 100% happy with your choice.

A good adviser will have the expertise to help you on your property journey throughout your lifetime. By surrounding yourself with a team of trusted industry professionals, you can be confident your first bricks-and-mortar investment is built upon a solid foundation.

budgeting 

There comes a time in every parent's life when they must take a deep breath and sit down to have a frank discussion with their kids about money. While the biological facts of life are pretty fundamental, getting a handle on being financially responsible is far more complex, especially by kids who are being driven by peer pressure and constantly lusting after the latest gadget or clothes. Teaching your kids, the importance of financial planning is just as important as teaching your kids about family planning, and will hopefully lead to fewer bailout loans from the Bank of Mum and Dad. 

State in Independence

There is no independence without financial independence. For any young person, it is all about being in control of their own destiny (or at least feeling as if they are in control - even if Mum and Dad are still their personal chef, cleaner and taxi driver). Giving your kid full control of their own budget is an important step on their path to self-sufficiency. 

Goal Setting

Do you remember the fable The Ant and the Grasshopper? The grasshopper larks about all summer, while the ant works to store food for the winter. Budgeting provides a similar lesson in the virtues of hard work and planning for the future. Learning to set goals and putting them in place is a vital skill, and one that is important to happiness in every aspect of life. 

Sense of Worth

There is no better way for a person to learn about the true value of money than by spending their own money. When there is hard work and tight budgeting behind the purchase of an expensive item, it will be more precious than if they magically appeared from Mum or Dad. Along with a greater appreciation of their possessions, your kids will also get a boost to their self-worth for being trusted to control their own finances. 

Resisting Temptation

By learning to budget, your kids will learn about setting personal barriers and resisting temptation. That game all their friends are playing may be cool, and is only $10.00, but that's $10.00 that they won't have available to spend on socialising over the weekend. Allocating money to specific targets is a great lesson in avoiding unnecessary value. 

BUDGETING 101:

Set your kids on the road to better budgeting by:

1. Lead by example - sit down and go through the family budget with your kid, so that they can see where the family funds are allocated. If they can see the true cost of running a household, it might just make them appreciate all your hard work.

2. Make money part of everyday life - once they have got their head around the family budget, let them have a go at controlling it. Hand over the reins of the family shopping for a week, or allow your kids to plan for a family day out. Give them the money and allow them to figure out how to spend it.

3. Make them earn their keep - earning money feels even better than spending it, so encourage your kids to get a part time job. Once they know they have a regular income, they will be able to budget and save for items they want.

Kids know more than parents about the internet and computers, so get them to save and plan online. Get them to explore different types of accounts that banks have and their benefits, so that they can make the most of their savings. 

 

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Contact Details

Zippy Finance 

PO Box 3078
North Turramurra
NSW 2074

T 1300 855 022 

Louisa Sanghera is a credit representative (437236) of BLSSA Pty Ltd ACN 117 651 760.  Australian Credit Licence 391237. ABN 85 168 278 975.

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