Your typical first home is great idea when you are fresh on the real estate market. They are affordable and a great way to get your feet wet. Whether you are looking for a home for yourself or an investment property, starting small is the smart way to build equity.
But, buying a typical first home does not mean you are stuck with that property for the long haul. There are tell-tale signs it is time to move on to bigger and better prospects.
1. You’re more financially stable
Starting out small has its advantages, including giving investors and homeowners more wiggle room for savings for future endeavours. If an improved income or savings status permits, trading a starter home for the next model up can be the next step in your long-term investment. Just keep in mind that bigger homes come with higher property costs such as rates, land tax and increased maintenance . Be sure to include those potential expenses in your budgeting when determining if upsizing is in the cards.
2. You’re running out of room
It happens. Couples starting out in their first home may eventually have families. That cute little cottage that was perfect for two may not be adequate when adding two or three children and a couple of fluffy friends to the mix.
3. You’re interested in reducing your commute
Working from home is a luxury some of us are afforded, but not everyone can pull it off or works for a company that permits it. Moving closer to work to reduce commute time is an excellent reason to upgrade. As your family grows and you become more tied down with commitments, decreasing the amount of time you spend driving to and from work is a definite advantage. If you’re going to make the move, it only makes sense to consider an upgrade if it is in your budget.
4. You’re working from home
If you work remotely, having the freedom to work at home is an amazing perk if you enjoy the quietness and comfort of a home office. If establishing a dedicated workspace in your current home is not possible, it may be time for an upgrade.
5. You’re taking advantage of the market
Real estate buyers currently are enjoying record-low interest rates. Whether you are looking to invest in real estate as part of a future nest egg or simply want more space for your residence, the market is gently nudging you to take advantage of current rates before they are gone.
6. You’re tired of living in a money pit
Homeownership comes with certain responsibilities, including maintenance of the exterior and interior of the property. These obligations can become quite the financial drain, turning your once treasured dream home into a money pit that sucks you dry. If the upkeep of your home has dominated all your time and money, an upgrade to a newer home with fewer immediate needs may be a wise investment.
7. You’re interested in building more wealth
Homeowners who are interested in increasing their wealth through investment property have the potential to earn a return on the investment when they upgrade from their first home. Real estate has the potential to consistently build more wealth than other asset classes. keeping your first home as a rental after you upgrade can be a smart move.
The Bottom Line
Buyers should take the appropriate steps to ensure they are making the right investment to match their overall financial goals. Whether you are looking for a personal residence or an investment, the Trilogy team can help with a free 30-minute finance strategy session. Phone us on 1300 657 132 to set an appointment with our team.
About the Author
Since 2008, David Thomas has built a business aimed at servicing the needs of property investors, owner occupiers and small business owners. David is recognised as one of the top 10 independent mortgage brokerages in the country, David and his team have settled almost billions of dollars worth of residential and investment loans over the last decade.
Known for his straightforward, relatable style, David believes by educating people about property funding; they fare better in the market. By sharing his expertise openly, some of the people he educates will likely become his clients. It's a win-win approach.
David Thomas is a credit representative (Representative Number 506153) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit Licence 391237).