As first time home buyers there is always that nagging question, should you build new or purchase an established property.
Each option has its good points and bad points, as first time buyers you’ll want to keep these front of mind as you make one of the most important financial decisions of your life.
Pros and Cons of New Homes for First Time Home Buyers
There are a number of benefits associated with buying a brand new home for first time buyers, such as the First Home Owner Grant Scheme. Purchasing a new home gives first time home buyers a blank canvas to work with, allowing you to select a decor of your choice. After the home has been constructed, it’s ready for you to move straight in. You won’t have to wait for settlement of a purchase or for the existing owners to move out as you would with an established home.
New homes are can be furnished with premium appliances, brand new materials and come equipped with Home Warranty Insurance, often referred to as Builders Warranty Insurance, to ensure that everything is in working order. New homes are likely to be more energy-efficient as a result of being constructed with the latest materials, saving you money over time.
The potential disadvantages of new homes for first time buyers include the fact that they can be more expensive than older homes, which you will pay for in higher monthly mortgage repayments. Many newly constructed homes are built on smaller lot sizes than established homes, due to the increasing cost of land development, which can lead to smaller room sizes and less space to work with for outdoor areas such as gardens, swimming pools and alfresco dining areas. If you see yourself working in a rambling garden, an established home may be a better choice.
Pros and Cons of Established Homes for First Time Home Buyers
Established homes are predominately situated within suburbs or communities that already exist, with all of the necessary infrastructure in place, such as public transport, roads, motorways, shops, schools and sports grounds. This can lead to a greater sense of community. A particular benefit of purchasing a period home for first time home buyers, is their character, bedrooms can be larger, they have high ceilings and picture windows.
Though, they are unlikely to have fitted wardrobes and the garage would more likely be smaller than that of a new home. When purchasing an established home first time home buyers have more negotiating power over the purchase price, resulting in lower mortgage repayments. Gardens will already be established with mature trees and plants.
However, older properties do have their risks as well. It’s important to pay for a pre-purchase property inspection, to ensure that all major items in the property are in working order, including the plumbing, roofing, wiring, heating and or air conditioning. Maintenance and repairs will be needed and your home may not be as energy-efficient without significant renovation.
The decision to buy or to build is not a simple or easy one, each property type comes with its own set of benefits. Ultimately, it will depend on your budget and your chosen property.
Consider your personal financial position and long-term goals, source professional advice on your actual borrowing capacity and ability to make your mortgage repayments from your mortgage broker and then carefully make your decision based on all the known facts.