Buying or building your home
Buying or building your own home is an emotional decision. You need to consider the needs of your existing family members and sometimes future members. Some people don't plan for long term and just want to buy or build something which is affordable and practical. Well everything starts with a budget and then a location which is convenient to you. Lets talk about buying your own home . And by "own home" we mean for your own living and not for renting out.
Buying Your Own First Home
Grown up kids thinking of moving out of parents home and then living in their own home , rather than renting is bit fast forward step. Because most of us first get a good job,rent for a while , then save and then find what we can afford. Younger home buyers can be very emotional when it comes to choosing and usually their decisions are based upon what others did, excitement and short term needs. This can put them into a financial stress. When the deposit is not sufficient , they have to rent for longer or ask for help from mum and dad for getting their equity to put a deposit for a home.
Whatever the way you move ahead , you need to consider the expenses which a home will bring such as:
1. Mortgage repayments
2. Council rates
3. Building insurance
4. Contents insurance
5. Water rates
6. Emergency services levy
These are the expenses you are going to incur on top of your household expenses and utility bills when you were renting. The only good thing which will happen now is that you are no longer paying rent to someone and no more landlord inspections. So budgeting all the expenses properly will help you to sleep easy.
Now the question comes, should i buy an existing old property or an existing new property which was just built?
Existing Old Property
1. Relatively cheaper as compared to new property.
2. Most of the times, comes with a bigger land.
3. Plenty of parking space and gardening area.
1. Old property can have issues related to structure because of the wear and tear.
2. May not be energy efficient due to poor insulation.
3. Adding more electrical points and air conditioning can be expensive
4 Usually comes with a single bathroom and toilet which is common to all bedrooms.
5. Bigger land requires lot of lawn mowing and weed eradication.
5. Parking space might not be practical.
Newly Built Property
This property has all the good things in it, which the old property didn't have, except the following:
1. You have to buy it as it is as you can't change the floor plan even if it is new.
2. You have to accept the location where it is already present.
3. You have to accommodate yourself in the property even if the room sizes are small .
4. Relatively expensive as compared to the old property.
And on top of both the properties, you need to pay full stamp duty for any of these you buy. Remember banks don't give loan for stamp duty, you need to use your savings for that. There is one relief for the newly built property if no one has ever lived in it and that is FIRST HOME OWNER'S GRANT, popularly called FHOG. IF you and the property you are going to purchase , qualify for the grant, its a bonus for you.
If these options don't fascinate you , then you can build a new home.
Building New Home
You need to find land first if you want to build a home. Sometimes it can be tricky because of the low supply of land in the market but still it gives you options in terms of choosing a location. You can also go for fixed price house and land packages . You can take a full turn key package or you can exclude items you don't want. It is like a tailor made suit. You can even upgrade the items in the house. Few benefits to look at :
1. Stamp duty is payable only on land , which saves you money.
2. Choice of designs and floor plans.
3. Still qualifies for FHOG if you never took it before.
The only drawback is that it takes time to build house . Adding all the evens together( land settlement, Working drawings, council approvals, build phase ) it can take around 7-8 months.
You will be paying interest on the draw down of your loan while the property is being built.