Whether to live there or to make an additional income, investing in real estate remains a safe bet. For a young couple, the first ideal real estate investment is, unquestionably, the purchase of the principal residence.
The acquisition of the first home will provide the couple with a sense of security and financial benefit. Indeed, the difference in price between renting and buying real estate is minimal, especially with credit rates favoring first-time buyers. In addition, to opt for a real estate investment is also to build a heritage for the future generation.
Nevertheless, this investment is far from risk-free. Without preparation, buying your first apartment can quickly turn into a nightmare and even spoil your future plans. To help you, here are some tips for making your first investment.
First real estate investment: to be the first-time buyer
The term “first-time buyer” is a term used in the field of real estate to designate an individual embarking on his first real estate purchase. In general, a first-time buyer does not yet own a property. These are, in general, young couples, most of whom are in a 25-34 age group.
More than 80% of first-time buyers are couples looking for their first home, of which 58% have at least one child. The most popular among these young parents are townhouses or pavilions. More specifically, the term “first-time buyer” does not necessarily apply to a person still new in the world of real estate investment.
Indeed, it may be a former owner but for one reason or another is not for more than two years before his next purchase. Finally, a person with several real estates may very well be a first-time buyer if he does not own his principal residence.
Invest in real estate, a good choice?
With the rent that keeps growing, becoming a homeowner is nowadays the best choice financially. Young couples often choose to settle in a small apartment. In most cases, they do not stay there for more than 7 years.
By selling their home, they can make a small capital gain and invest in another house more spacious and better suits their desires. The first residence ideal for a young couple who has not yet loaded, it is obviously the single-family house or why not an apartment?
To find the first home, in general, the couple chooses to use a real estate agency. However, it can happen that the rare pearl is found through word of mouth. Moving out to the periphery is also a good way to invest in real estate at a lower cost.
What are the questions to ask for the acquisition of his first principal residence?
Before going head to head in the purchase of your first home, it is important to study the market well and ask yourself a few questions. As mentioned above, this investment is important from a financial point of view. It is therefore advisable to always carefully study this project for a lifetime.
Can we afford to embark on such a project?
The real estate market is very diverse. Most first-time buyers will find an offer up to their budget. However, can they afford the house of their dreams? Having a house is good. But should you buy a small apartment far from your expectations or is it better to stay in this house that you rent? Most young parents are tempted by the second choice.
Do you think you will stay there long?
Before investing in a principal residence, it is important to be based on the long term. Indeed, from a financial point of view, in most cases, it turns out that renting is more advantageous than buying a principal residence in case you do not think to stay there long, in principle, more than 5 years old.
Check This Out: 7 Golden Rules of Investing in Real Estate Business
However, this minimum duration varies depending on the region in which you want to settle. Indeed, the higher the price of the area is a high and affordable rental, the longer it is.
How many areas do you really need?
To invest in real estate, it is important to know the area you really need. Remember to plan the future children’s room or the work to be done in the future. Indeed, as it was stipulated previously, we must always project ourselves into the future.
What are the records for such an investment?
Buying a property must be done in total transparency. Banks are, moreover, very strict for the acquisition of the first residence. A loan application file, to be admissible, must include the following documents: identity documents, employment contract, pay slips (usually those for the last three months before the filing of your file), tax notice, and account statements and where applicable, the schedule of outstanding credits.
These documents allow the banker to know your financial situation and gauge your level of motivation. He can draw up your profile. To have the best chances of obtaining a mortgage for the purchase of your first home, if you have a few means, it would be wise to have a personal contribution of 10% or more on the total price. However, a loan without contribution is also possible under certain conditions.To maximizes your chances of obtaining a mortgage; submit your application to several banks. This task can quickly become boring. So, to help you in the search for a loan, the best option is to offer the services of a mortgage broker. The latter will take care of your file with the banks and negotiate the best rates. A real estate broker is paid only when your file is validated.
What helps a first-time buyer can claim?
Compared to other potential buyers, the first-time buyer is at a disadvantage. Indeed, a person already having a principal residence and wanting to acquire a new one can very well sell the old residence to finance his purchase. To overcome this imbalance, the public authority has put in place some devices to help first-time buyers.
The most famous of them is, without a doubt, the loan at zero rates. This applies only to first-time buyers, including those who have not owned the new acquisition for the last two years and new or completely renovated homes. It can cover up to 40% of the total value of the property.
For information, it is quite possible to register for different devices simultaneously. More complex to implement, this solution can be very useful to you.