Buying property? Then this blog is for you!!

This blog helps the property buying community to more easily share strategies, stories and helpful tips. It is an open blog. Anyone can join, contribute and invite others to join.

If you would like to talk property, please contact us:
Office: 1300 911 576
Martyn Fleming: 0400 000 822
Guy Clarke: 0409 055 128

07 October 2009

Buying property - What sequence works best?

As Buyer's Agents, we recommend the following preliminary steps when buying property. We explore this in more detail with our clients, but here's a quick summary:

Structure --> Budget --> Finance --> Assemble the team = Buy!!

Visit your accountant and work out the most tax-effective entity for your property purchase. For many people (particularly home owners), you will buy your property in your own name. However, when you're about to purchase additional properties and start building a portfolio, it's good to ask the question - "What entity should I buy this in?"

Your accountant should consider two key elements:
1. What is tax-effective for you?
2. What is your risk profile?

The word budget is probably not the sexiest word on the planet (it's up there with "diet" and "tax return"), however, it's a very necessary step. Sit down and work out how much money you're earning and spending each month, then work out how much you feel comfortable as an ongoing commitment. Remember to include all costs (building repairs, maintenance, rates, agent's fees, etc), as well as any depreciation benefit from the property. Now you're ready to ask a mortgage broker about your borrowing capacity (the bank's opinion of what you can afford).

Finance (borrowing capacity)
Why didn't we make this the first step??

Structure comes first, so we can request finance pre-approval for the entity actually buying property. There's little point in applying for finance pre-approval for an entity which isn't actually going to buy the property. You could be buying it in your own name, but you could also end up buying it under a trust entity or a Pty Ltd. The documentation needed by the finance broker could be completely different.

Assemble the team
This is important. Work out who is helping you with your property purchase and write down their contact details. Include your conveyancing solicitor, building and pest inspector and your buyer's agent (of course). This way, you're able to act fast and generate a contract quickly.

Tip: Don't forget to start communicating with your team throughout the buying process. Don't wait until you've signed a contract!

Now... you're ready to buy!!!

Yours in property!

1 comment:

doshimaitri said...

Knowing your financial position will help you determine how much you can borrow, so you can start setting realistic expectations in terms of what house you can look at potentially buying.The next srep is arranging for the finance.Most properties that are for sale will have set open for inspection times where potential purchasers can inspect the property. These times will be displayed in the advertisements. If the property you want to inspect does not specify a time, call the agent to arrange a time to inspect the property.Before you make an offer, it is a good idea to appoint a conveyancing solicitor or conveyancer to help you with the conveyancing process. Conveyancing is the process where a property is transferred from one party to another and is generally done by a solicitor or conveyancer, although some people do it themselves .After getting the full report you could move on the further buying process.