So you’re looking to buy your first property? That’s fantastic news. So now that you have decided you want to buy a property, which property type should you buy? There are plenty of residential housing choices out there from older established housing, townhouses, house and land packages as well as brand new apartments built off the plan. With so many choices available, it can be quite confusing to know what property is the best purchase for you.
It is unlikely that the first property you buy will be the property you will live in for the rest of your life. Attitudes are changing and today people typically move around more compared to the past. We move home for a number of reasons including in search for a new job, attend university and for a larger home to raise a family.
You should also bear in mind that the first property you buy doesn’t have to be a property to live in either. You can simply buy a property as an investment first, whilst continuing to rent or live at home and buy your own home to live in later on.
You therefore need to first work out what it is you want to achieve from a property and then go from there. Are you simply looking for somewhere to live or are you thinking about turning the property into an investment property and generate a rental income?
With property becoming increasingly more expensive, particularly in Sydney, it’s becoming even harder for first home buyers to get a foothold on the property ladder. However, one way of purchasing your first property is to buy a property off the plan.
Buying property off the plan provides an easier entry method into the property market and it is also a relatively safe investment type, compared to shares for example which can be extremely volatile.
All that you initially require is a 10% deposit to secure your property and you don’t have to pay anything else, besides legal fees until settlement. The great advantage of this is that you get more time to save up a larger deposit, without having to pay a mortgage.
So why should your first property be bought off the plan? Here are 8 reasons to consider.
8 REASONS TO BUY YOUR FIRST PROPERTY OFF THE PLAN
1. ONLY 10% DEPOSIT REQUIRED
As first time buyers generally struggle to save, especially as wages growth is not growing at the same pace, you will be pleased to know that you typically only require a 10% deposit to secure a property off the plan. In some cases, a developer might accept a 5% deposit instead, making off the plan even more attractive.
2. GENERALLY CHEAPER
Compared to an established property, a property bought off the plan is generally cheaper the earlier you get in. If you buy before construction even starts then you might secure a property at entry prices, whilst the later you buy, the higher the prices will go. Ensuring that you are signed up to mailing lists such as with iBuyNew will ensure you get notice of first-release projects and pre-release.
3. GIVES YOU MORE TIME
One of the greatest benefits of buying property off the plan is that it gives you more time. This not only includes more time to save and plan for settlement, but also time in the market to gain from capital growth as well as time to complete applications including loans and first home owner grants. This added time will reduce the pressure of buying a property, making the whole process a less stressful and rushed one.
4. FIRST HOME OWNER GRANT AVAILABLE
If you are planning on living in the property then you might be eligible for the first home owner grant. This grant is only available for new properties including off the plan and not for established homes. Eligible first home buyers can save thousands of dollars through the grant and the amount depends on the state you buy in. In Sydney for example you could save $10,000.
Many first time buyers will tend to buy a property first to live in to take advantage of the grant and then turn this into an investment property afterwards to benefit from tax savings. If this approach sounds like something that might interest you, then it’s worthwhile speaking to our Property Consultants at iBuyNew who can run through this approach in more detail.
5. IT’S BRAND NEW
Why buy an older property which may have ongoing maintenance problems when you can buy a brand new one? Not only will your new property be designed for modern day living with brand new appliances, fittings and fixtures that comes with guarantees, but it will also be far more energy efficient, reducing your power bills. Tenants also love new and will be prepared to pay a premium for this luxury.
6. MORE CHOICE
Buying off the plan also provides buyers with more choice. If you buy early enough you might be allowed to choose your preferred colour scheme as well as take advantage of the best available floor plans for the best price. Within a development, there might be many apartments of the same type on different levels, giving you more chance to secure your favourite floor plan. If you buy once the development has completed, you will tend to find that the floor plans no one really wanted are the ones that are left.
7. LESS COMPETITION
Buying property off the plan also means that there is typically less competition to go up against, compared to an auction for example. Auctions can be a really stressful experience with bidding wars and little chance to secure the property for the price you wanted due to a large turnout, or more people willing to spend more money than you.
iBuyNew has over 180 developments across Sydney, Melbourne and Brisbane to choose from and by speaking to one of our Property Consultants we can ensure you go on our mailing list to receive first pick of our newest developments, sometimes before they are even released to the general public!
8. STAMP DUTY SAVINGS
As well as the potential to save money through the first home owner grant, buyers of off the plan property can also receive stamp duty concessions. Again this is dependent on the state you buy in as well as the property purchase price, so it is best to check on the government website for the most up to date information.