It’s no secret that it’s more difficult to buy a property than ever before. In fact, it’s become so difficult that many young people have effectively given up on the dream, at least in some cities, anyway. However, though it might not be as easy as it was back in the 1980s, that doesn’t mean that it’s impossible. Plenty of new homeowners join the property ladder each year, and so can you.
But knowing when to buy a property can be difficult. Some people buy a house before they’re ready, and they’re usually the ones that end up experiencing ‘buyer’s remorse’; on the other hand, other people end up waiting too long, which, while not the end of the world, can have a negative impact on their financial standing.
It’s best not to wait until you “feel” that it’s time to buy a property. Instead, take a more methodical approach. In this post, we’re going to run through some telltale signs that now’s the right time to go through the home-buying process. If you tick ‘yes’ to all (or most) below, then homeownership might be in your near future.
You Have Savings
You can buy a house without savings, but you’ll be making things much more difficult for yourself, both in the short and long term. In fact, having a large chunk of cash to use as your down payment is so important that many financial advisors recommend saving for another year until you have enough in the pot to get the type of property you’re looking for. However, note that it’s sometimes possible to have too much cash — at some point, it’s best to put the money to use by buying a property and building equity, so don’t become too obsessed with saving thousands more than necessary.
You Have Full-Time, Secure Employment
This is probably the biggest obstacle for most people. The days of the majority of the population having long-term stable employment are gone. But of course, it does exist — it’s just not as common as it used to be. You should have a clear sense of your earning power, both now and in the future, before agreeing to buy a property. It’s easy to let excitement and temptation get the better of you, but remember that you’ll be living with this decision for decades to come, so be sure to have a clear understanding of your career and industry as a whole.
You’re Not Carrying Expensive Debt
A little bit of debt is fine; most people have debt in some form or another. But keep in mind that when you buy a property, you’ll likely be taking on a lot more debt — in fact, it’ll probably be the biggest debt you ever owe — and, at that point, you’ll want to be free of other financial obligations. If you have big commitments related to student loans, personal loans, or credit card debt, then be sure to clear them first, or at least put a big dent in them so that they’re not weighing you down. Plus, you’ll need as much cash as possible for all the other things that surround a home purchase, such as money for renovations, insurance, moving costs, and so on.
You’re Ready to Settle Down
It’s true that you can always sell the property you buy if you one day discover that it’s not what you want. But that’s not a scenario you want to find yourself in. Buying a property is a long old task, and once you’ve finally completed your mission, you should expect to reap the rewards of your efforts for at least 7 – 10 years. Anything shorter would be like completing a master’s degree and then deciding you want to work in another field. So think of the commitment; are you ready to make it? If you still have grand ambitions to travel the world or spend time living in New York or somewhere, then it’ll be best to get those dreams out of the way first. They’ll be within reach even if you do buy a house, but they’ll become more difficult once you’re settled down.
You Know How Much You Can Afford
Properties come in all shapes and sizes. Some will be suitable for you from a practical point of view — say, they have the required number of bedrooms — and some will be beyond your reach because of other factors, such as the cost. It’s a good idea to have a clear sense of your budget before you begin looking. Getting a mortgage quote will give you a clear idea of the types of properties you should be looking at, and even tell you if homeownership is a realistic option at this stage of your life. Once you know how much funding will be available to you, you’ll have a clearer idea of whether it’s something you want to do or not.
You’re Tired of Renting
Renting definitely has its place in the market, and it’s something that we all do from time to time. However, while it can be useful in certain scenarios, at some point it may begin to feel like a financial drag. If you’re tired of paying your landlord’s wage, then take a look at buying a property. Just be aware that while it’s an effective way to secure your financial future, it does bring some drawbacks that you won’t have to contend with if you rent; for example, when renting, you don’t have to worry about paying for maintenance costs.
You Know What You’re Looking For
Finally, it could be simply that you’ve begun thinking about the type of house that you’d like to own. People who do not want to buy a property do not have those thoughts, so if you’re picking out neighborhoods and property types, and thinking of how you’ll decorate the space, then you’re probably much further along the journey than you realize. At that point, it’ll be a good idea to begin getting your ducks in a row and seeing what’s out there.