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If you are considering moving to Australia and buying a property there, you need to know that the cost of living in Australian cities is up to 0.66 higher than in the United States. Meanwhile, the Australian average salary is $68.250 per year and rises to $104.375 for an experienced worker.
That is why it is important to be careful and thorough when you’re intended to invest in a house in Australia. Here are six tips on how to buy property in Australia you need to read first.
Evaluate your finances and budget
The first thing to do is evaluate your finances and budget. This is important so you can find out how much you can borrow from the bank to finance your house purchase. As you know, the amount of money you can borrow for a house mortgage is determined by a lot of factors.
To get financed for your house purchase, you must mostly clear from debts, reduce your card limits, and negotiate your payment schedule if you’re struggling to meet credit payments. Remember, if you have bad credit records, this might not be the best time to invest in a property. You need to clear your credit first.
Find out the interest rate
Even if you have the deposit for the house ready, you still need to learn to choose the best financing. Make sure you understand all the terms and conditions of the agreement before signing it. You need to find out the interest rate, the loan term, the possibility of redrawing funds, the ability to make additional repayment, and how often the interest rate is calculated.
Choose a tenure suitable to your ability
The next tip on how to buy property in Australia is choosing the right tenure. Buying a house is expensive; therefore, choosing the right loan tenure will help you reduce the overall loan burden.
Usually, the repayment tenure for a home loan starts from five years to 30 years. In exceptional cases, some financing institution is willing to give 35 years of tenure.
When you’re taking a loan for a home purchase, the interest payable is calculated at the beginning based on the tenure. Then, the principal and interest are split in monthly installments. That is why the tenure will directly impact how much you pay every month.
Longer tenure will give you a smaller EMI; however, the overall interest will be higher. On the other hand, shorter tenure will give you higher, but the total interest is much smaller. Consider your financing ability, and you will be able to find out the suitable tenure for your home loan.
Research the developers and their reputation
The next step is to research the developers that build the house you intend to purchase. You will need to learn about their reputation and find out if they are trustworthy. You will need to visit their website to learn about the insight of the companies. From their website, you can learn who the owners are, their history, their partners and associates, how long they operate, and the projects they have.
Then, you can visit the completed projects to see if it is as good as they advertised. Find out the layouts and finishes of their completed projects. This way, you know what to expect when buying a house from them.
Understand the risks
Just like much financial commitment, purchasing a house also pose various risks you need to understand. Therefore, you need to review the advantages and risks before buying a property in Australia.
The benefits of investing in a home are appreciation, deductible expenses, tax deductions, and home equity. However, it also poses risks such as depreciation, high upfront cost, and illiquidity.
Check the home market price in the area
The home market prices in some major cities, including Sydney, Brisbane, Perth, and Melbourne, are rising. Therefore, you can expect higher property prices here. However, these cosmopolitan centers do provide the best work potential.
In rural areas, the price can be considerably cheaper. However, you need to understand that buying rural homes in Australia can mean that it is really remote and far from everywhere else. Therefore, do your search thoroughly first.
These are the six tips on how to buy property in Australia. Investing in property in Australia can be a great option if you’re considering moving and working there. However, as mentioned previously, make sure you do thorough research first.