Need vs Want
The way we evaluate property differs if we are looking to buy a home or an investment property. Being clear with what our wants and needs are in both scenarios is vital for choosing the right property. Whether you are looking to begin putting down your roots in a home, or if you are purchasing purely to create wealth, being realistic about your wants and needs is an important division to make. We've compiled a list of questions to assist you in deciphering the difference between what your next property needs to contain to meet your requirements, and what you wish for the property to contain.
Purchasing a Home
If you are looking to purchase a home, money isn't the only thing that you'll be considering. As a place that you may be calling home for years to come, you'll be considering your personal taste, your emotions, and the future you see for yourself and your family.
What can you afford per month? How reliable is your income?
What do you need in a home? How much space do you need now and how much will you be needing in the future?
Do you need a home that is close to work, schools, employment opportunities?
Will the home deliver a long-term return on investment (ROI)?
Purchasing an Investment Property
Purchasing an investment property is a different story to purchasing a home to live in, as your primary need is to generate a passive income. As an investment, you'll be considering the condition of the property, the location, employment opportunities, as well as it's potential for growth.
Is the property new or old? What repairs and updates are necessary?
What costs are involved in upkeeping the property?
Is the location in high demand? How have property values performed over the past 10 years?
Are there schools, parks, hospitals, universities close by?
If it is in a regional area, what public transport is available to major cities?
Is the population within the area forecast to grow?
What is the current employment rate?
What is the plan for infrastructure in the area over the next 10 years?
If you are looking to purchase an investment property, you want to be buying in an area that is not fully established, and in an area that has plenty of room for growth. Vacancy rates and rental returns are key factors to consider.
Buying a property as a home or as an investment are two very different purchases. Be sure that you are clear on what the property needs to contain for it to fulfill your needs, and be prepared to let go of some of your wants and wishes. Be sure that you know your goals and your budget as a buyer. Make sure you do your research and seek advice from knowledgeable advisors who can assist you in moving in the right direction.