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Buying First - Mortgage Mantra

Buying First

Choosing to buy a second property before selling your first property has its pros and cons like all the other options, but can be a smart way to buy time! Before deciding whether to buy or sell first, you need to take into consideration your overall property goals. Having a clear set of goals will make it easier to see whether buying a new place first is going to be in your best interest, or if you’re better off using the sale of your first home to launch into the next.

Main Pros of buying a new property first

One of the main pros of buying a new property first is having the luxury of shopping around for the perfect addition to your property portfolio! With no settlement date for your previous property looming on the horizon, you don’t have the time constraint to just buy whatever is available at the time and can instead wait for the right property to become available.

The Downside of this?

While time being on your side is a huge benefit, you could be held back by your finances! Not a huge amount of people can afford to put a deposit down on a second home with the sale of the first, as the equity is all tied up in that existing property!
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    Renting out your first property

    Renting out your first property is another option if you want to buy a second property. Starting to build your property investment portfolio can be a very beneficial thing, especially if you can rent the first property out! Even for a short term, it gives you a bit of extra cash to play with until, or if, you end up wanting to sell it. The financial help from rent will help keep that mortgage from completely draining your wallet while you shop for a second property.

    Another potential con of owning two properties at once is having two sets of insurances to pay for. When you own two homes at once, you have twice the amount of insurances to cover to keep both properties protected. This strain on the finances can often encourage sellers to settle quickly on a lower asking price on their existing property in order to get the money without delay. Really take into account if you can afford to own two properties at once, especially if you don’t know for sure when your first property will eventually sell - leaving you with a potentially big bill to pay for an indefinite amount of time.

    There are a few other questions you should ask yourself before you consider buying another
    property!

    • Why did you buy the first property? Has it achieved the goals you had set out for it? Will holding onto that property while you buy another one get in the way of those goals?
    • Would you buy your first property again? If you would, then it might be worth holding onto it as it is obviously a good addition to your portfolio.
    • How much money could you free up by selling your first property before buying a second?
    • What value do you foresee in holding onto your first property while you shop for a second? Will you rent it out? Will you live in it? Is the new property for renting out?

    If you are looking to buy first, sell first or hold onto your investment properties - our expert team of brokers at Mortgage Mantra can help you find the best strategy for your funds, your long and short term goals when it comes to property and your own personal satisfaction. We are here to take the stress out of going solo on these substantial financial decisions, and will offer impartial and up-to-date advice every time!

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    We have created the tools to map the constellations so you don’t have to.

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