Buyers: Know What You Want.
Written by Matt on March 14th, 2009
Last night, I had the chance to sit down with some first time buyers. It was great to see all the enthusiasm that poured out of them about different homes, floorplans, and buildings. At the end of the night the entire coffee table was a huge pile of different floorplans, price sheets, condo-brochures and MLS properties. This enthusiasm is sometimes lost when you have purchased two or three homes, and it reminds me why I LOVE working with first time buyers. The couple was in a great position - nice down-payment, great steady jobs, even have parental backing for the mortgage, plus there was no need to move by any certain time since they are currently renting (except for his personal goal). They are in the position that many people wish to be in when looking for a home.
After speaking with them for a little bit of time, a couple things started to come to light. They had not been able to decide whether to purchase a home to live in (nice condo downtown) or purchase an investment rental property. Obviously this is a huge decision, and one that they should make before starting to look, it really depends on what their goals are and where they see themselves in five or ten years.
As buyers, you almost need to stop and ask yourselves, “Where do I see myself in five years? At the same job? How far from work do I want to live? Can I use Public Transportation to get to work? Do I want to have a pet? Will I need to move to a larger home sooner than five years (think kids)? “. As well you should think about what your real estate goals are, “Is this going to be an investment or my primary place to live? What kind of a return do I expect to see from the property? Do I expect to sell and make 30%? Or am I okay with breaking even? What if I lose money?”
You’re not alone if you are thinking about owning an investment property. But it certainly is not for everybody, ask yourself - “Can I see myself being a landlord? Do I enjoy dealing with other people? What happens if my tenant does not pay rent? Can I afford to carry the expenses (mortgage, insurance, water etc) for a couple months (maybe three or four even!)? Will I enjoy getting calls at 3 or 4 am, when I have to work at 7am?”
Basically, try and figure out as much as you can before its too late. Take the time and think about what the situations will be like, ask and talk to people that you know who are living/doing where/what you are thinking. Talk to a mortgage broker and know for a fact what you are pre-approved for, this alone might make the decision for you. Every time you speak to someone, they will (hopefully) be able to offer you some information or experience that you never thought about.
Know what you want, know where you want to be, just know yourself. You will thank yourself for stopping and taking the time to figure these small but very important facts out now before your make this large investment.
- Matt
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Matt Richling is a sales representative with RE/MAX Affiliates Realty Ltd., Brokerage, Independently Owned and Operated - The opinions of the authors expressed herein do not necessarily state or reflect those of the RE/MAX or RE/MAX Affiliates Realty Ltd., Brokerage.