What Property Type Is Right For You

It is important to weigh up all the options before deciding whether or not to buy your own home.

Your housing options are not necessarily limited to brand-new houses; you might also consider purchasing an off-the-plan apartment or a newly renovated duplex.

Buying a home vs building one

Buying an established home is a good alternative to building a new place, because you know what you’re getting. But if you build, you have the advantage of being able to design it to your own tastes and needs.

Many people are eager to sign a dotted line and start living in a house after they have inspected it. However, depending on the cost of land and construction, it can sometimes be more cost effective to build a new house rather than buy an existing one.

Building a home can also be an attractive option if you’re looking to save money on stamp duty, since you only pay duty on the value of the vacant land and not the yet-to-be-built home. In some states, the First Home Owner Grant (FHOG) is only available if you build from scratch — you can find more information about the FHOG by state and territory here.

Buying ‘off the plan’

‘Off the plan’ means buying a property before it is built, or whilst it is only partially completed. Depending on the contract agreement, you may get a new home that has already been designed, with the option to change its finishes or fixtures.

Developers may require you to make a deposit of 5% to 20% when you purchase an ‘off the plan’ home, but the time taken to complete construction gives you more time to save up.

The risks of buying a property off the plan include the possibility that the property market will fall while the place is being built and that this may impact your ability to borrow.

Common types of property

When looking for a new home, do not limit yourself to one or two types of residences. There are many diverse options that exist!

Apartments and units

As the cost of housing rises, more people are considering apartment living. A unit could mean less time spent on chores like mowing lawns or cleaning gutters. However, it’s a good idea to budget for quarterly strata levies which pay for the maintenance of common property.

Townhouses and villas

A townhouse, villa or apartment may be a more affordable and low-maintenance alternative to a house, but your home may feature an outdoor terrace or courtyard, where you can enjoy al fresco living or perhaps a small garden.

Many townhouses and villas are held through strata title, so expect to pay strata levies to cover building maintenance.

Dual occupancies

Dual occupancy buildings consist of two homes built on a single block and share the same title. The size of blocks varies widely, though a dual occupancy usually provides enough room to have a small garden or an outdoor space.

Duplexes

Duplexes are similar to dual occupancies, but with a common wall. Both types of dwellings are made more affordable by their small blocks, but duplexes offer the added benefit of privacy. While this can work well for some people, you may face issues with noise or having to share building insurance with your neighbour.

House and land packages

New home and land packages can be a suitable option for people dreaming of a new house. These packages may be available in new suburban developments, where land is more affordable.

One advantage of buying a new home is that it is likely to be built using modern materials and new appliances, so you can pocket the savings on energy costs. Just be sure you know exactly what you are buying–for instance, fencing isn’t always included in the package price. You should also factor in the transport and lifestyle costs of living in an area further from the city.

Newly renovated homes

If you’re looking to save time and money, or if you’re not interested in making major improvements to a property, buying a newly renovated home might be the way to go.

You may pay a premium for the seller’s hard work and renovations, so check that the work complies with local building codes. You should request certificates of compliance before making an offer on the property.

Fixer-uppers

Buying an older house that requires repairs may be a budget-friendly way to get into your first home. Older homes sometimes offer buyers the opportunity to secure a larger block or greater location, but they can take some work. Before buying an older home, be sure to go into the purchase with your eyes wide open: Older homes may hide nasty surprises, so consider seeking out a professional inspection before signing on the dotted line.

Necessities vs nice-to-haves

To know the type of home that’s right for you, you need to identify the features you need and those that are nice but not essential.

Create a list of the features you must have in a home. This can help you focus on the most important elements when you are inspecting properties and save you time when comparing them.

If a second bathroom isn’t a necessity, you can leave it off your list.

If you are unsure of what kind of home you’d like, it could be helpful to research your options and speak with an expert. A My LMI Group broker can help you consider the financial implications of various home purchases, which might narrow down your search.