So you’re all set to go. You already own a home and want to upsize or downsize into the next one. However, you might not know what to do first – whether you should invest in your new property and then sell your existing one or vice versa. The most often asked question we hear from customers in this situation is, ‘Should I purchase or sell first?’
If you are looking for Melbourne property investing opportunities, there are three major elements at work here, that you should consider.
How is the market performing? Is it a buyers’ or a sellers’ market?
What is your risk tolerance? How will you feel if you sell your house but haven’t found a new one? How would you feel if you buy a new home and don’t know what your present one will sell for or IF it will sell within your preferred time frame?
How is your financial situation? Do you require the proceeds from your existing home in order to acquire and settle on the next one? Do you have a 10% down payment available without having to sell your home?
If you have a good idea of where you stand with regard to these three factors, it might make your decision a little bit easier. No one else can answer these questions for you when you are looking to invest in property, but there are experts out there who can help you come to a conclusion by asking the right questions, coming up with a plan of action, and determining the best course for you and your family. And those experts are called property investment advisors.Â
When investing in a Melbourne property, the settlement term is a crucial consideration – what is your optimum settlement duration? The longer the period, the better, so you may sell or acquire within that time frame and potentially even close on the same day. Have you addressed bridging loans and related expenses with your lender if you are unable to settle on the same day?
Here are some pros and cons of selling first:
- You’ll know EXACTLY how much money you have to spend on your next buy.
- As a result of the early release of the purchaser’s deposit from your house, you will have money ready for your future purchase.
- You might not be able to choose anything to buy before settlement. In that instance, you could have to stay with relatives or friends or in a short-term rental. This will result in more movements, additional expenditures, and probable difficulties.
- You may be allowed to choose your own settlement time. Be aware that when selling, it is advisable to be as flexible as possible on settlement in order to attract the greatest number of purchasers.
Here are some pros and cons if you buy first
- You will know for sure that you have located your new ideal home and will be able to proceed with the selling process with ease.
- Due to a lack of inventory, it may be difficult to identify the correct property; therefore, if you have a limited budget for your next purchase, it may be better to ensure you’ve identified the right property first.
- If you are unable to sell prior to closing on your new home, you will most likely need to arrange bridging loans, which may be costly and must be cleared with your lender before proceeding.
- Is it a reasonable choice to lease out your current home if you are unable to sell it for whatever reason?
As with practically everything in real estate, it’s not an exact science, and it’s up to the individual to figure out what’s best for them. So you may schedule a meeting with Wakelin, a leading property advisor in Melbourne, to go over the various possibilities and choose what is best for you.
Read Also: How to Get the Highest Property Damage Settlement
