Why compromise is vital for property buyers
It’s a truth universally acknowledged that compromise is part and parcel of the human experience.
Whether it’s discussing who is going to do the dishes after dinner or recognising that your budget won’t allow you to buy a Ferrari, but you can afford to purchase a snazzy little Fiat – we all have to make compromises in our lives. Personally I’d go for neither, but that’s me 😉
And this is especially true for property buyers, whether you are purchasing your first home or your third investment property.
This is because you can only work with the stock that is available to purchase at the time, whether it’s new or established, but the determining factor is always your borrowing power, which determines your buying budget.
The saying “dreams are free” is very relevant for property buyers, because you can only ever work with the funds that you have available to you.
Compromise is key
At Adviseable we have a variety of new and existing clients, who all have differing budgets to work with.
Some are purchasing homes to live in now or in the future, but many are buying investment properties in myriad locations around the nation.
The one thing that they do all have in common, mind you, is the need to sometimes compromise to ensure they can push forward with their purchasing plans.
Now, for first-time property buyers, this is often about reducing your expenses, so that you can increase your borrowing capacity, which could mean paying off (and closing) your credit card or you could decide to move in with a family member to help save more money for a deposit and also improve your borrowing capacity.
When anyone has bought their first property, there have often been other compromises in relation to geography and dwelling type that have been required to make their dream become a reality.
Perhaps their budgets won’t allow them to purchase in certain locations – such as where they are currently renting – but they can afford to purchase an investment property in more affordable locations around the nation.
Likewise, for prospective homeowners, you may need to compromise on the dwelling type, which could mean buying a three-bedroom house instead of a four-bedroom home, or it could require purchasing a townhouse or duplex in your favoured suburbs instead. Arguably this would also make savvier investment in terms of changing Australian demographics and family sizes.
Borrowing capacity
When it comes to property investment, borrowing capacity will likely determine where and what you can purchase.
Often this capacity is dictated by the equity you have in your own home if you are an existing property owner– given you will be extracting funds to finance the deposit – as well as your income and expenses.
Again, this is where compromise is likely to be needed, because your borrowing power will dictate where and what you can afford to purchase as an investment property.
We have been strategically buying investment properties around the nation for our clients in a variety of locations where we have identified capital growth potential as well as excellent cash flow for years now.
Many of these locations are not ones that our clients had considered before, but given they are working with experts like us, they recognise that our number one job is to identify areas with upside potential that everyday property buyers would struggle to recognise themselves.
We live and breathe property research and analysis, which is why so many of our clients are repeat customers and recommend our services to their friends and families, too.
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Disclaimer: The information provided on this blog is for general informational purposes only and is not intended to be financial advice. The content is not a substitute for professional financial advice, diagnosis, or treatment. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your personal finances. Reliance on any information provided by this blog is solely at your own risk.
