Recently I sold my home
It was a cute unit on the water at Mooloolaba on the Sunshine Coast.
As head of research at Real Property Advice I review all sorts of data and trends and believed that my suburb was peaking at the top of its property cycle.
Yes, I am now temporarily homeless, (renting a house) while I wait for the market to ease / cool and will buy again when the market has softened. This strategy allows me to take advantage of local market cycles, ultimately creating more equity and less long-term debt for me personally.
It’s great to follow the property clock, to be prepared and not listen too much to media hype and scare information.
But, there is a risk in getting out of the property market, in that you may never get back in. I buy property for people as a job & a passion, so hopefully with my knowledge and expertise in this area, I won’t be one of those people who are always waiting ‘for a great deal’ or the ‘right property’. Because in reality, if you hold anything long enough, it will generally make money over time.
I was always interested in property and in my first year in a new job in a local Council I bought my first home. I didn’t really know much about property back then, except renting was wasting money, and that I needed to buy something and put my money into a mortgage – like a forced savings account.
At my workplace, I worked with a lady who was about mid 40s at the time, who was wanting to buy a house. I spent the first few years, looking at houses online with her, explaining how contracts, stamp duty, legals etc all worked. She was always rushing off after work and spending every weekend looking at open houses and must have signed about 50 contracts in those years, sometimes multiple contracts on the same day, to see which one panned out (no penalties back then).
She bailed out on every contract, due to one issue or another. Sometimes it was just minor things like, no window here, or she didn’t like the garden, etc. It took me a while to realise that a) there is no such thing as a perfect house, and b) she was never going to find the perfect house.
Well fast forward to today, some 16 years later, and I’ve bought, and built and renovated and 7 homes, and my friend has not bought one house. She is still renting and house sitting for friends. I saw her recently and you can see the despair she now faces, the possibility that the only place she can now afford, is a long way out into the country where houses are much cheaper.
Now at nearly 60 years of age, her ability to get a home loan is greatly reduced. Generally, banks loan money in accordance to the period of work life you have left. Retirement is 65 years of age, so banks deem my friend has only 5 years to pay off her mortgage. Sadly, there is a high possibility, that she will rent for the rest of her life.
In reality, any house she would have bought 16 years ago, in a decent location, would have more than doubled in that time.
So how do you avoid being like my friend – 60 years of age, renting and little chance of actually being able to get a mortgage, and the inability to make a decision.
So when is the best time to buy?
Well almost anytime if it is going to be a long term hold. But there is a way to buy smarter.
As an independent woman and property professional I will give you my top 4 tips to make it happen for you:
- Education – The biggest and best thing you can do is educate yourself. The marketing companies and property spruikers are only there to make money for themselves. So, don’t be fooled by the glossy brochures, seminars and media hype.
- Find a specialist – Buyers Advocate or Qualified Property Advisor. Find someone who is NOT getting a commission from you buying a property, but charges a professional fee for their services / advice.
- Know the property cycle! – How to take advantage of when the market is low and what to do when the market is high.
- Don’t seek perfection – You will never find the perfect home, so don’t use this as an excuse to not make a decision!
For more information on this article or anything property related, contact us via 1300 66 77 89 or via email here.
Karin is a passionate property investor who owns multiple investment properties. She has spent many years researching property, law and literature in her previous job roles with McCullough Robertson Lawyers and QLD Libraries. Karin’s is head of Research at Real Property Advice, not just focusing on properties, but regions, suburbs, social trends, industries, infrastructure and demographics.