Should I buy or rent?
When I first came to Australia from England back in 1988, I couldn't wait to get into my own house. I had never been to Australia before, and migrated without ever having seen the place. This meant I had a bunch of pre-conceived ideas based on what I had read and seen on the TV. Many of these were wrong.
I stayed with friends on the south side of Brisbane for the first six weeks. Within the first two weeks I found employment and a house.
It was a three bedroom low set brick house, (bungalow), on a quarter of an acre with a swimming pool & gum trees in the back yard. There was plenty of car accommodation, and it was about 25km south of Brisbane, in an almost rural setting. (Today, that same area, Browns Plains, is absolutely crammed with housing and a huge shopping centre).
Once I saw the house and surroundings, I knew I had to buy it. I put in an offer of $84,000, and it was accepted. Within 30 days I had moved in. To my British background, and experience of living & growing up in south London, this place seemed like the Ponderosa. Admittedly it needed a bit of work, (total redecoration, new kitchen, pavers around the pool, a new liner for the pool), but I thought I was a bargain. How wrong I was.
Don't rush into anything! It is much better to put time & effort into research, than to make a snap decision that you may regret for years!
I lived in that house for five years, spent nearly $30,000 on it, and finally sold it for $110,000. You do the maths. Not the most fruitful investment one could have made! Having experienced the relentless growth of the UK housing market, (I left before it crashed), I expected a similar deal from Browns Plains.
At that time, the Brisbane housing market was stagnant. I couldn't have made a worse decision. What I should have done was rent a place. If I had done this, I would have got to know Brisbane & its suburbs before making a purchase decision.
It can be tempting to rush in and buy something that looks like a bargain. Even if you have been to Australia before, and feel you have a good grasp of the housing market, think twice before signing that contract.
Do your homework:
- Research the area and type of property you are interested in on the Internet. (See links below to get you started).
- Find out what has sold in the area, and how much for. (Most real estate agents will help with this & you can visit www.onthehouse.com.au & propertyvalue.com.
- Go to the area. Get a feel for the demographics & socio economic cross section of the place.
- Look at the types of house and the condition of them.
- Are there a lot of renovations in progress? (This is a good sign and normally means other people think the area is worth investing in).
- What facilities are there in the area? (Schools, transport, shops, sports centres etc).
- Talk to the local police and ask about crime rates in the area.
- Talk to an insurance company to find out what sort of risk they think the area is.
- Check what data the Australian Bureau of Statistics (ABS) have on the area & the local housing market.
Where I Should Have Bought
The next house I bought was in the Bayside suburb of Manly, about 20km east of Brisbane. This is where I should have bought in the first place. A good rule of thumb is to buy anything you can, as close to the water as possible. This equation has worked very well for me over the years.
The main message I hope to convey here, is don't rush into anything! It is much better to put time & effort into research, than to make a snap decision that you may regret for years.
If you have any questions or comments regarding this article, please feel free to contact us.
