Why you should talk to a Financial Adviser before you purchase property
One of the greatest assets you will ever potentially own will be your home or an investment property. It might be the only asset, other than your superannuation fund, so it is important to seek the right advice and have the best players on your support team to help you make the right financial choices.
The decision to buy a home quite often stems from an inherent desire for security and belonging, a cultural conditioning through generations of family and friends who own homes/property, plus great marketing and sales people.
Most people will purchase a home based on what they can afford and in the location that suits their current needs. That can be the extent of the forward planning.
When it comes to buying the greatest asset you may ever own, if you only seek the input of a Real Estate agent, you may be taking advice and guidance from someone who does not have a clear understanding of your financial needs, affordability or tax situation. In most cases they are not qualified to give specific advice.
They can establish what you are prepared to spend, if you have children and if finance has been approved. This will help them narrow down the property options that may best suit you.
The rest is on you.
This is not having a ‘go’ at the agent, for they are in fact doing their job and in almost all cases doing a great service for both parties, however it must be understood that agents represent sellers (vendors) and are paid commissions from the proceeds of sales whether you or someone else purchases the property.
From a security perspective, it is up to you to be aware of what you are entering into and what is best for you, both now and in the long term.
There are two things to always keep in mind when it comes to making the right financial choices, whether it is buying a house or other investments, namely;
1) the end game and
2) the practicality of what and why you are doing what you are doing
Be careful when making decisions based on your feelings and what everybody else is doing.
Many of us have this fear of wanting to be seen as ‘in with the crowd’ because we might miss out – FOMO (Fear Of Missing Out) as the kids call it these days. As such our decisions can come at a cost and come back to haunt us financially.
This ‘impulse’ behaviour can repeat itself when it comes to buying material assets like cars, boats, pools, extensions and holidays. These can all be good ways to spend money, however you might just be seeking out all the ‘right’ reasons to justify your want to ‘have now’ and ‘do now, when in fact there may not be a genuine need for such things at all!
We all need shelter, yet instead of choosing the right dwelling, most people want a big, fancy house with all the modern luxuries that essentially serves the same purpose yet at a higher cost. Practical thinking can often be pushed to the side.
So when it comes to the prospect of investing into the biggest asset you may ever own, or buying fun things along the way, you should consider engaging the services of a Financial Adviser.
Talking with a professional can give you unbiased clarity and help you see all sides of the situation. Your financial adviser can guide you through the myriad of reasons, risks and implications involved with a particular decision or opportunity and show you alternative ways to reach your goals.
You may be pleasantly surprised to learn what you can achieve with a strategic plan, and you may also be equally surprised so see where you may be wasting money.
When it comes to buying property, your financial adviser can:
- Work with a mortgage broker to ascertain all the options available to you including the right mortgage structure.
- Determine affordability with deposits, stamp duty, ongoing costs, ownership structure and cashflow.
- Work this purchase into your ‘life plan’ along with your personal goals and financial objectives by way of a strategic plan.
Whatever the cost of engaging a suitably qualified Financial Planner is, it has to be better than randomly trying to do it on your own, hoping for the best that one day you may land on your feet!
‘Time is a commodity that cannot be replaced. For to make up ground could mean having to take greater risks or settling for less after a lifetime of hard work’- Paul Betti, Founder of AFA
If you are considering purchasing a home or investment property, we encourage you to meet with an experienced AFA adviser. Our qualified team can help you make good decisions enabling you to spend more time enjoying your life instead of working longer to pay it all off. When it is all said and done Life is more than Money and we want to see everyone enjoy the fruits of their labour.
Disclaimer: Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.
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