Home ownership is a dream for more than one in two renters in 2019. 54% of young people hope to become homeowners between 30 and 35 years. This stage of life, which generally translates a search for stability, can however be realized before the thirties. Having taken the step myself, I suggest you to discover my advice for a first successful real estate purchase.
Recommended: Chiado Real Estate
Many tenants think, often wrongly, that they can not access
the property for financial reasons. But among them, how many have already
calculated their annual expenses in rent? Rents “lost” since this
money will generate no return on investment…
With my husband, we dared to do it, this calculation. And we
can say that it caused us an electroshock! For 8 years, we rented an apartment
for 694 € per month. That is 66,624 € spent in the wind. Even if this fact made
us sick, it was decisive in our choice to become owners. By increasing our
housing budget a bit and getting into debt over 20 years, we have been able to
acquire an apartment of our own!
To you, who dream of independence and first successful real
estate purchase but have not yet jumped, here are some tips.
Tip # 1: Determine
the Needs and Search Criteria for Your First Real Estate Purchase
A (first) real estate purchase is reflected in the medium
term. It must meet your current needs while being able to adapt to your future
life, which may evolve. Whether you are alone, in a relationship, with or
without children, imagine what your life might be like in 3, 5 or 7 years and
ask yourself the right questions. What surface are you looking for? How many
pieces are needed? Rather apartment or house? With or without a garden? What is
the best location for your professional life and the infrastructures located
nearby (shops, schools, associations, transport, road access…)? So many
questions that must be asked before starting research. Because it is by
establishing a framework and priorities that you will be able to evaluate the
potential of the properties you will visit. A potential that is important to
take full measure, since it is he who will define the current and future value
of housing.
I recently read in a study that the French keep on average
their property for 7 years. It is therefore likely that your first real estate
purchase eventually leads to a new project (purchase of a house or apartment
with a different configuration or location, for example). Having fully
estimated the potential of your home as soon as you buy it, you will certainly
be able to rent it or sell it more easily, at a price close to its purchase
price.
Tip # 2: Define Your
Contribution and Borrowing Capacity
Once the list of essentials is established, return to
reality: the budget! Key point of any real estate purchase, it is from him that
everything will flow.
Appointment at first with your bank advisor to make a
precise inventory of your situation. The main points that will affect your loan
will be:
- Professional situation (profession, type of
contract …)
- Income
- Savings capacity (banks are sometimes more
confident towards a client with average salary but who save than towards a
client with high incomes but who does not save money)
- Possible debt ratio (up to 33% of net income,
except for high wages or some professions considered “carrier” for
which the rate may be higher)
- Analysis of bank accounts (late payments,
overdrafts …)
- Personal contribution (the more important it is,
the less the client is considered “at risk” for the establishment)
A tip that has served us well during our first real estate
purchase: insist that you do not want to indebt you in a rash manner by showing
that you have always honored the settlement of your rents.
Once the financing proposal has been obtained by your bank,
do not hesitate to play the competition. Ask other banks or consult a broker
who will find the best offer for you.
Tip # 3: Learn about
Assisted Loans and Alternative Financing Solutions
Some loans exist to facilitate access to housing for
first-time buyers. The most famous of them is the zero interest loans, which
allows you to benefit from a rate without interest or fees. The following guide
details its advantages and the conditions for accessing them: download the guide.
Other forms of
assistance exist, such as the loan for social benefits (which provides for
notary fees and reduced filing fees) or the housing equity loan (better known
as the “1% housing loan”), which offers some employees to take
advantage of a complementary loan at a favorable rate.
The interest-free
loans or grants are also common during a first property purchase. Speaking of
our project with our entourage, we ourselves had some nice surprises since
relatives wanted to give us a financial boost.
This is why some market players propose to help you
orchestrate the generosity of your friends, families and colleague’s .The brand
goes even further since it contributes financially to each project put online.
Solutions to build or
strengthen his personal contribution exist!
Tip # 4: Be Aware of Ancillary Costs
When buying a first property, it is necessary to be well
aware of the existence of certain ancillary costs.
Beyond the purchase price of your home, consider notary
fees. In the new, they are reduced, which can weigh in the balance nine vs old.
Especially since we then benefit from several guarantees, which ensure the
quality and the final rendering of housing, as well as the latest technical
standards in force.
Loan insurance, the mortgage loan guarantee and some banking
fees are also added to the bill. A tip: with good negotiation, it is possible
to make significant savings in their overall cost.
Being a property owner is also paying a housing tax (you
already pay one by being a tenant) but especially a property tax (the amount
varies depending on the location of the property). All that being said, you
will always be a winner compared to the rent you paid previously, without
having anything in return.
Tip # 5: Inform
Yourself about the Environment and the Condominium (in Case of Purchase of an
Apartment)
As I said before, location is one of the key points of any
real estate purchase. Do not hesitate to go around the city and the
neighborhood at several hours of the day and night. This will allow you to soak
up the atmosphere that will reign in your future home. Because an apartment or
a quiet house between noon and two can be a little less during peak hours …We
will avoid unpleasant surprises once the cartons unpacked!
Last little advice if
you plan to buy a first apartment already built; ask to see the minutes of the
last general meetings of the condominium. You will be aware of any work that
has been voted.
So… Are you getting
started?
