How to choose your forever home and why it is a smart way to buy

A “forever home” – one you’ll own and live in for at least 15 to 20 years can offer more stability than constantly upgrading.

It’s a purchase that makes most sense when work and family dynamics are expected to remain relatively stable, allowing home owners to settle in and take advantage of the benefits of long-term ownership.

For home owners who upgrade frequently, high transaction costs mean considerable growth is necessarily before moving on, but that’s less of an issue with forever homes.

The major benefit is minimising buying and holding costs because this is usually our most expensive asset in life.

Compared with an investment property, a forever home is an emotional and lifestyle purchase. But it has additional benefits beyond the positive impact on day-to-day life.

Most forever home hunters start searching for their home from their mid-30s. They already own a home and are usually starting a family.

Family and convenience

It’s best to target a property and location that maximises convenience throughout early childhood. Raising a family is by far the largest complicating factor. The years of primary and secondary schooling are likely to require the most thought.

Planning for children’s education before buying will pay off further down the track.

School zones

School zones are a major factor. Most buyers place the greatest focus on secondary schools.

Layout

The home itself needs to be suitable for decades of family living, with not only enough bedrooms for a rising head count, but the right layout too. A single bathroom usually won’t cut it, and it’s a good idea to give kids their own space. A second living area is something that’s highly desirable.

Financial decisions

Most buyers need to sell their current property to fund the purchase of their forever home, but, depending on the property, it may be possible to retain the original home as an investment.

If you want to be able to optimise the potential for tax deductions in the future, should a property become an investment, then you want to focus on making interest reduction payments via an offset account over and above the minimum repayment on your loan.

Expectations vs Reality

Buyers thinking about purchasing a forever home sooner rather than later may need to prioritise affordability and adjust expectations. A reduction in household income that often comes with raising children will also need to be considered.

Buyers aim for the humblest house and location that still meets family requirements over the long term, and maintain an effective money management system.

If you can do this with one home purchase, or even two, you are ahead of most people and can then free up cash flow to focus on investing and living with less stress.

*source Domain

Posted in Buy, Latest news, News on 21st August, 2019