Factors to consider when buying your first property

I recently did a poll on my social media pages asking my audience what factors they would consider first when buying their first property.

The four available options were: Proximity to amenities, Size of the property (number of bedrooms), Location and Price.

Those who engaged with the poll stated various, well-thought-out reasons for their choices and this showed the differing thought processes people go through on a buying journey.

I was amazed at how the different options were interpreted at different levels on the individual’s priority list. So, as a follow-up to that, I came up with this in-depth article looking at the various factors to consider when buying your first property.

The list is by no means exhaustive, but it can serve as a guideline on what you need to consider.

Buying your first property is a significant milestone in anyone’s life. It’s a thrilling and rewarding experience that comes with a sense of accomplishment and the opportunity to build wealth for future posterity and provide the start and foundation for generational momentum.

However, it is also a complex and daunting process that requires careful consideration and planning. To ensure a successful purchase, aspiring homeowners must take into account several key factors.

In this article, I will be discussing some of these considerations (which I personally think are important) and offer you valuable insights to guide you through the journey of buying your first property.

Financial readiness

Purchasing a property is a significant and serious financial commitment and one that shouldn’t be taken lightly. It is essential to assess your financial readiness before diving into the real estate market.

Begin by understanding your current financial situation — evaluate your income, savings, and existing debt. It is recommended to maintain a stable job or income source and develop a strong credit score (if applicable) before pursuing a property purchase.

Explore your mortgage pre-approval options to determine the loan amount you can qualify for, which will help you identify a suitable budget for your purchase.

This will also greatly help you in managing your other financial commitments so that you don’t take on too much of a financial burden.

You don’t want to live in your dream house and be in too much debt. Buying your dream house is the best thing one can accomplish but on the other hand, it shouldn’t turn out to be a liability that you will be servicing for years and affecting your other commitments.

Budget and affordability

Much like the above factor, determining a realistic budget is critical when buying your first property.

With your home most likely being the single largest purchase of your life you should allocate a comfortable amount to spend on your monthly mortgage payments while considering additional expenses such as property taxes, insurance, and maintenance costs.

It is crucial to strike a balance between your long-term financial goals and fulfilling your housing needs.
Remember, a well-planned and sustainable budget will help secure your financial well-being and enable you to enjoy your property without unnecessary stress in the long term.

In this case, I’d even say “Be honest with yourself about your financial situation.” Nobody knows your finances better than you, so make sure you buy a home that won’t overextend your debt-to-income ratio.

Location

The old adage, “Location, location, location” still holds true in the real estate market. Choosing the right location is one of the most crucial decisions to think about when purchasing a property.

With location, comes other accompanying factors such as like proximity to your workplace, educational institutions, healthcare facilities, transportation, sporting recreational retail and community amenities.

Location also means the neighbourhood/suburb.

In Harare, for example, properties in the Northern suburbs (low density) have historically been preferred locations for anyone looking to buy a home. However, with the expansion of the city, people have started to look in other locations such as Domboshava, Norton and Ruwa for property purchases.

These areas are further away from the CBD, but their location hasn’t deterred people that much. So, depending on your priorities, location can be the most important or least important factor to consider.

However, in the poll that I spoke of at the beginning, location was arguably the most popular answer the audience picked.

Additionally, you should do some research on the neighbourhood’s stability and future development plans. These can greatly impact your property’s appreciation potential. Ensure you strike the right balance between your desired location and your budgetary constraints.

Property type and features

One should also consider the type of property that suits their needs — whether it’s a single-family home, townhouse, condominium flat for rental, or apartment. Each type has its advantages and disadvantages, so evaluate them against your lifestyle and long-term family structure;

Will you have kids? Will you someday stay with extended family members? These are some of the questions people don’t account for in the immediate future, but can come back to cause you stress years down the line as they won’t have enough space to accommodate their changing lifestyles.

It’s important to take into consideration the property’s features and amenities such as the number of bedrooms and bathrooms, outdoor spaces, parking facilities, security measures, accessibility and any future remodelling/extension work. Think long-term, and prioritise your needs and wants, ensuring they align with the available options and future plans.

Property inspection

I cannot stress this point enough! Never overlook the importance of a thorough property inspection before finalising any purchase. This is a lifetime purchase and you want to get it right the first time.

Engage a professional home inspector to assess the property’s structural condition, electrical and plumbing systems, and potential hidden issues. Even if a property is new, there could be hidden issues that you’re not aware of.

A comprehensive evaluation can identify any potential concerns or repairs required, which will allow you to make an informed decision and negotiate the price accordingly. A small investment in a thorough inspection can save you from significant expenses in the future.

Legal considerations / due diligence

If you’re not too familiar with the legalities of buying property, Navigating the legal aspects can be daunting and confusing.

Engaging a qualified real estate attorney is strongly recommended to guide you through the process. Your legal representative will review all the necessary documents; purchase agreements, title deeds, and any other legal documents to ensure a smooth and secure transaction.

They can also provide valuable insights and highlight any legal constraints or issues associated with the property. This is another area where investing in an external party to assist you comes in handy to ensure everything is above board (Do your due diligence properly).

Future plans

This factor is also linked to property type and features. Since buying your first property is a significant commitment, it should align with your future plans. Consider all factors that might seem trivial; career aspirations, family plans, and potentially relocating to another place for one reason or another.

Keep an eye on how much customization will be required in each property you see and ensure the property you choose suits your long-term goals and offers the flexibility to adapt to any changes that may arise.

Also, think of what you want to do with your property; Do you want to 1. Buy and sell (flip), 2. Buy to keep and rent out, or 3. Buy to live in. All these options have different customisation requirements and your choices have to reflect this.

A well-thought-out purchase that accommodates your future plans will provide stability and financial security in the years to come.

Future growth potential

One underlying theme with property purchases: Always think long-term! When purchasing your first property, it is also essential to consider its future growth potential. Research your location’s real estate market trends and recent developments to gauge the property’s potential value appreciation.

Factors such as planned infrastructure projects, zoning changes, and nearby commercial developments can significantly impact the growth potential of your investment.

A property with good growth potential can be an excellent long-term asset and may provide you with a higher return on investment should you decide to sell it in the future.

Professional guidance

Lastly, seek professional guidance throughout the property purchase process. Never be afraid to look for and engage with several experienced developers and property agents.

This will be immensely beneficial to you. A knowledgeable professional in the real estate sector can help you navigate the market, give you tips on how you can negotiate the best deal, and share valuable information.

They can also offer insights into property values, market trends, and local regulations, empowering you to make informed decisions.

Conclusion

In conclusion, purchasing your first property is an exciting journey that requires careful consideration of several factors.

By being financially prepared, setting a realistic budget, choosing your most suitable location, thoroughly inspecting properties, considering future growth potential, and seeking legal guidance, you can make a successful and rewarding purchase.

It is your ticket to establishing a stable foundation for your future, building wealth, and enjoying the pride of homeownership.

Use these factors as points of consideration in your search for your dream home and you will most definitely make the right purchase.

Ken Sharpe is a serial entrepreneur, innovator and visionary. Since 2006, Real Estate and property development has been his primary focus. He has done this with WestProp, a customer centric, private developer of exceptional properties in Zimbabwe. This article was first published on his LinkedIn page.0-businessweek