Deciding which type of property is right for you

There are a range of different property options available

It’s all well and good to talk about buying your own home, but it’s hard to decide what would be right for you if you haven’t weighed up all the options. Your options aren’t always limited to brand new houses — a home could mean anything from an off the plan apartment, to a newly renovated duplex.

Buying a home vs building one

Buying an established home means you know what you’re getting. But building a new place lets you tailor the home to your tastes and needs.Plenty of people want to sign a dotted line, get their furniture in, and start living in the house they inspected. But depending on where you buy, it can sometimes be cost effective to build a new place rather than buy an existing home.Choosing to build can provide savings on stamp duty too, 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’

Buying ‘off the plan’ means committing to buy a property where construction hasn’t started yet, or where it’s 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.You may need a deposit of 5% to 20% to secure your ‘off the plan’ home, but the time taken to complete construction may provide extra time to build up your savings. One of the key risks of buying ‘off the plan’ is that the property market may change while the place is being built, and a fall in your home’s value could impact how much you can borrow.

Common types of property

Don’t get caught in the trap of only looking at one or two different types of homes. There are many exciting and diverse options out there!

Apartments and units

Apartment living is becoming popular. It may be a more affordable choice than buying a house. A unit could also 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

Like apartments, a townhouse or villa may also be affordable and have lower maintenance requirements than a house. However, your home may feature an outdoor terrace or courtyard, where you can enjoy al fresco living or perhaps a small garden.Townhouses and villas are often held through strata title — so expect to pay strata levies to cover building maintenance.

Dual occupancies

Dual occupancy buildings are two homes built on a single block, though each has its own 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

A duplex is similar to a dual occupancy — both are usually made more affordable by their small blocks — but different in that the two dwellings are often linked by a common wall. While this may work great for some people, there are potential concerns with noise and privacy. Both homes may also need to share a single building insurance policy — so you have to rely on your neighbour to keep their half in good shape.

House and land packages

If you’re dreaming of a new home, house and land packages can be a straightforward option. These packages are often available in new suburban developments, where land may be more affordable.One advantage is that the house is likely to be built using modern materials and new appliances, so you could pocket the power savings of a more energy efficient home. Just be sure you know exactly what you are buying – fencing for instance, 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 short on time, or you’re just not interested in completing major improvements, buying a newly renovated home might be the way to go. Be aware, you could pay a premium for the seller’s hard work and renovating efforts. Take the time to check that the work done complies with the local council’s building codes — it’s a good idea to request certificates of compliance.

Fixer-uppers

Buying a place that needs some TLC could be a budget-friendly way to get into your first home. Older homes may sometimes give you the opportunity to secure a larger block or greater location, but they can take some work. Older homes may hide nasty surprises, so be sure to go into the purchase with your eyes wide open.

Necessities vs nice-to-haves

Knowing the type of home that’s right for you is just one step. You also need to separate the features you need, from those that are nice but not essential. Draw up a list of the non-negotiables. These are the home features you really need. This can help you stay focused when you’re inspecting different properties and save you time when comparing them. Then make a separate list of the features that would be nice to have, but which you can live without in your first home. A second bathroom might be handy, but it may not be a must-have for a couple with no children or living in a one-bedroom apartment.

If you don’t know what kind of home you’d like, it might help to do your research and speak with an expert. Your local FND Broker can help you work out what financial options you have available to you, which might narrow down your search.