Homebuyers speak out: “What I wish I’d known before buying my first property”

Homebuyers speak out: “What I wish I’d known before buying my first property”

first home buyersDo you remember the enthusiasm you felt upon that initial spark: “Hey, I should buy a place!”

If you succeeded in buying your property, then what would you say to your past self now that the dust has settled? Would you warn yourself off, or encourage yourself forward?

I wanted to know your thoughts, and I knew it would be invaluable advice for prospective new homebuyers too. So I asked home owners from across the country one simple question:

What’s the one thing you wish you’d known before you bought your first property?

You all shared tremendously practical insights for any aspiring home buyer (or those that may want some reminders).

This is precisely the type of knowledge DIY Property Investment aspires to create and share, to provide the ultimate online resource for the home buying and property investment community.

Extra expenses

This was by far the most common response. To aid new home buyers, I’ve compiled a complete list of property expenses so that there aren’t so many surprises as there were for the rest of us.

“Painting, finishing the garden, rates, taxes, buying curtains.”

Just everything that needs to be done once the keys have been handed over. The additional expenses cost us about $15,000 – $20,000.”

“I’m currently doing it for the second time around, and I’m much more prepared this time.”

Liora, Perth. Liora partnered with her Sister and decided to buy land and contracted a builder to build their first property.

“How much you’ll have to pay in total, on top of the price of the property.”

– Jan, Sydney. Jan bought with his best friend.

“Probably all the extra fees. People aren’t usually prepared for that.”

– Kayla, Sydney. Kayla bought with her boyfriend.

“What surprised me was all the legal fees that were accrued throughout the buying process.”

“We were also blessed with having a huge support network. I think that’s so important for when things get stressful that you have others you can turn to for advice and support.”

Rachel, Sydney. Rachel bought with her boyfriend.

“I wish I got accurate strata fees on my new apartment instead of estimates.”

– AJ, Sydney. AJ bought an off the plan property.

Capital gains tax

capital gains taxThere were plenty of homeowners who wish they knew more about this one.

If you’re one of them, you NEED to read 11 strategies to minimise your capital gains tax. It will save you tens of thousands of dollars, maybe more.

“I wish I knew more about capital gains tax, and especially how to avoid it!”

Damian, Sydney. Damian bought with his wife.

“Understanding capital gains tax better, such as what you need to put in place when and if you ever decided to sell the property in the future.”

– Milan, Sydney. Milan bought with his brother.

“One thing I still would like to understand is capital gains tax. How is it calculated? Does it change if the property has been rented? We had to rent our place out for 11 months before we could actually move in.”

“Also – ask lots of questions. We had been looking for over a year and asked plenty of questions before we purchased, so we haven’t really had any surprises since we bought the place.”

Mathew, Sydney. Mathew bought with his wife.

Renovation headaches

“A better idea of the true costs (time and money) of renovating our place.”

Katrina, Sydney. Katrina bought with her husband.

“How much money we were going to spend on it. I think a lot of people get caught off guard by the cost of renovating. You end up going more and more into debt.”

Jeni, Sydney. Jeni bought with her husband.

Cash flow

property cash flow“An understanding of our cash flow e.g. when stamp duty is paid, 1st agency fees are debited, 1st monthly rental income is received etc.”

Edward, Sydney. Edward bought with his wife.

“Buying my first property suddenly meant that overnight my money went from very straightforward to being a lot more complicated.”

“That being said, I wish I knew that owning a place doesn’t have to be a complete ball & chain if you buy within your limits.”

“Saving a little bit each week over a longer period of time rather than trying to save all in one year really helps in still being able to have a life.”

Shelley, Brisbane. Shelley bought with her parents.

First home owners grant

“We should have bought our place in just one of our names so that we could double claim on the first home owners grant.”

– Daniel, Sunshine Coast. Daniel bought with his fiancé.

What he means is, when you buy a property with a partner, you only receive one FHO grant, but it counts as both of you having received it. By having only one name on the property, the other could then get the grant if they purchased a second property.

This strategy is obviously best suited to those who have a high level of trust with their investment partner. Also, most of the first home buyer benefits have now been removed, unless you’re in WA or NT or buying or building a new home.

Getting your money’s worth

buying propertyArguably the most critical element of success in property investment is buying the right property, in the right location, at the right price.

“It’s value down the track. It’s so important to buy in the right area. Our first house was a big mistake.”

“It’s very true what they say about location. It’s better to buy the worst house in a good street, than the best house in a bad street.”

“We picked a bad suburb. Then the government put housing commission in so the property value dropped.”

– Cathie, Sydney. Cathie bought with her husband.

“Make sure what you’re paying is the true market value. This gives your investment the best chance of being successful”

– Greg, Sydney. Greg bought with his wife.

Are you noticing a common theme? Almost everyone’s purchased with a partner. Husbands, wives, fiancés, boyfriends, girlfriends, parents, best friends, brothers, sisters… there’s no doubt it’s much more affordable to get started when you team up with someone. To learn how to work out what YOU can afford, check out the free Property Investment 101 Guide.

“Learn how to negotiate. Each $1,000 in the purchase price works out to be a significant amount of money at the end of a loan, and that’s my cash which I worked hard for.”

– Andrew, NSW North Coast. Andrew bought with his wife

Property maintenance

property maintenance“The additional hidden costs like maintenance catch people out a bit. Then if you don’t have enough money to maintain your property you may end up devaluing your investment.”

– Colin, NSW North Coast. Colin bought with his wife.

“I wish we’d followed through on a couple of maintenance requests that we were concerned about.”

– Elisa, Alice Springs. Elisa bought with her husband. She also had some advice for those just starting out:

“We read various websites, spoke with other home owners, parents, mortgage brokers, banks, conveyancers, real estate agents, and asked LOTS of questions. And we shopped around quite a bit.”

This is something I can definitely relate to, and was one of my main influences for creating this site. The aim is to create a resource that will save you time on the steep learning curve of buying real estate.

What’s one piece of advice you’d give to someone looking to buy?

And if you’re looking, what’s the one thing you’d like to know the most?


images by Philip Taylor, Ken Teegardin, Hannah Sheffield and Richard Foster

5 thoughts on “Homebuyers speak out: “What I wish I’d known before buying my first property”

  1. Carmen

    Hello Adam

    Do Beneficiaries pay CGT if left in their names and they sell within 2 years as my property does fall under a partial CGT but l have no intention of selling but as it falls outside the 6 year rule and still currently leased but looking at refurbishing the property and to become my main PPOR and leaving it to family.


  2. Carmen

    Hi Adam

    Your website is so informative and so straight forward. My question is the dreaded CGT on my investment property purchased back in 2008 and has passed the 6 year rule by 5 years as the property had been leased as soon as the contract had been signed and still generating and income for me so l would be up for a large Chunk of CGT should l decide to sell . I am looking and ceasing the lease within the next 24mths as l have retired but not of pension age, generating an income below $30,000 and will move into my property in due course time and looking at a full refurbishment and the property will be my PPOR I do not own any other properties, the property will not be sold but left to family members in my will should they decide to sell after the 2 year period will they need to pay a partial CGT I have never revalued the property but into today’s market it would be worth at least up to another $200,000plus. Appreciate any feedback.
    Regards Carmen


  3. Farida

    I thought Fixed HL was good in case its rates goes up. Remember one time was 9%? well, I was there! Then they kept falling to now to max. 4 point something percent and some Banks ridiculously charge 5% or 5.5%.

    Now, come to think of fixed loan is actually sux. Yes I deliberately spelled sux . Why? because when you finish your fixed and if you want to go on Variable , they charge you with their comparison rates and they sometimes 6.3% or whatever they wish.

    If you re-fix it, you only can contribute $10K a year. So, if you win Lotto or get inheritance and want to pay your loan off and it still on fixed, either you pay its exit fee or wait until your fix ends.

    Fixed is good when HL rates keep going up but if you fix it, don’t fix it too long ie. 5 years. I would personally fix it maximum 2 years…..from my own experience after buying 3rd property. Or you can half fix it and half variable or 40/60, 20/80 etc etc.

    Also, if you use your Equity to buy another property, try Tasmania. The lands are larger than Sydney. Houses are still cheap. Don’t worry, you will get Tenants! Don’t forget its beautiful sceneries, uncongested traffics. I bought 600 square meters land with million dollars view for only $78K and I am spending $350K max to build a 3BR dream home. When I say million dollars view, it sits on a high cliff facing Frederick Henry Bay . And Air B&B in the area is about $150/n per room. In 10 to 20 years time Tasmania will be booming and those lands & houses will be high up.

    Google 65 Grevillea St Primrose Sands 7173.

  4. Carol Coates

    My parents are 91 years old I have owned half of the property since 1986 My parents owned their half before 1985 I moved into the residence as my permanent home 6 months ago Bothe parent have left their half of the house to me in their wills. Will I be up for capital gains and roughly how much as the property is now worth approx. $800K Would I be better to purchase their half now

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