Buying A Home On Your Own

Flying solo: buying a home on your own

Buying

Finance


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Are you thinking about buying a property on your own? There are certainly a lot of benefits to sole property ownership - primarily that you have complete control over the purchase decision -  from which property you choose to buy to how much you pay for it and what type of loan you take out. 

Before taking the leap there are many important factors to consider. 

Behind the scenes: the hidden costs of property ownership 

When you set out to buy your own property you will need to save for all associated costs, as well as being solely responsible for the mortgage repayments. 

At the time of purchase you will have to account for: 

  • The initial deposit: usually a minimum of 10% of the full property purchase price. 
  • Stamp duty: this fee is different from state to state in Australia. In Victoria, it equates to approximately 8% of the purchase price. To learn more about stamp duty costs in your state visit: business.gov.au
  • Loan establishment. 
  • Legal fees. 
  • Accountant’s fees; if you enlist their help. 

Take the time to speak to your financial institution about these costs so there are no surprises once you have signed on the dotted line. 

Don't forget to shop around for a mortgage too! You may find a better offer outside of your current financial institution. 

What additional ongoing costs should you prepare for? 

Prior to the purchase of your property you will also have to take into account and research the local council rates for your new area - these rates will vary between councils. 

If you have decided to purchase an apartment or unit there are also body corporate fees for the maintenance and general upkeep of communal spaces. Body corporate costs are dependent on each individual building. In general, locations that feature greater amenities - such as a gym, pool and cinema - will attract higher body corporate fees. 

Investment property versus home ownership 

Whether you are searching for an investment property or hunting for a place to live in, the reason you have decided to purchase an property is integral to the buying process and may impact the costs associated. 

Investors: the facts 

If buying an investment property, you will not be able to receive first time buyer benefits. This doesn't mean there aren’t advantages for investors too. 

Not wanting to live in your new property opens up greater location options. Consider looking for a property in areas where property prices are lower, such as interstate, for a more cost effective purchase and the possibility of higher return on investment in the future. 

Top tip: When buying to invest always conduct thorough research on the area you are looking to purchase in, to make sure it is attractive to the rental market. 

Home ownership: the facts 

If you are buying your own home, think carefully about what is most important to you. Factors including size, floor plan and potential capital growth generally impact the decision making process. 

Personal and lifestyle considerations are also vital to happiness once you finally move in. If you’re keen to have pet, an outdoor area may be on your life of “must-haves”. If you don’t own a car selecting a home within close proximity to work or public transport may be of significant importance to you. 

Knowing what you are prepared to compromise on and what is non-negotiable will help you find the perfect place to call home - of your own.


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