Posted on September 30, 2021 in Finance

Looking into purchasing a second home, but not quite sure where to start? We’ve come up with a quick and easy home buyer guide to help you out.

There are lots of reasons for buying a second home. Maybe you’ve outgrown your existing space, but aren’t quite ready to say goodbye yet. You and your partner might want to set up a new chapter of your lives together, or move to a different school catchment for your kids.

Whatever your reasons, there’s never been a better time to be a second home buyer in Perth. Find out how you can make it happen!

  1. Is buying a second home a good investment?

Let’s begin with the big question. Ultimately, buying any home is a big investment, so it really pays to have a good strategy. Here are some things to consider:

  • Will you be able to afford repayments on two mortgages?
  • What rental income can you expect to make?
  • How long do you expect to keep both homes? Is it a short-term or long-term commitment?
  • Is there scope to add more value in the future?

By taking the time to consider these important questions, you can help to take a lot of the stress away from your final decision.

  1. How can you afford a deposit?

Everyone knows one of the most important things about buying a home is saving up for a deposit. As a second home buyer, you might not have to. How? It all comes down to the equity in your existing home.

To put it simply, equity is the difference between the value of your property and the outstanding debt on your home loan.

EQUITY = THE VALUE OF YOUR HOME – AMOUNT OWED ON YOUR MORTGAGE

For example, if your home is worth $600,000 and your current outstanding debt is $400,000, that means you have $200,000 worth of equity. In most cases, you are able to borrow up to 80% of the value of your current home, which leaves you with $80,000 of usable equity for a deposit in this scenario.

To find out more about usable equity, our partners at The Loan Company can give you all the support you need.

  1. What extra costs are there?

The costs of purchasing a second home don’t end once you’ve paid the deposit and set up your mortgage. There are a number of additional costs you will need to factor in throughout the year, which include:

  • Council rates
  • Home and contents insurance (including landlord’s insurance)
  • Property management fees
  • Ongoing maintenance

When it comes to these ongoing costs, it helps to set up a budget to help you keep up with monthly repayments. Make sure to factor in any changes to your working situation and give yourself a good buffer for any unforeseen costs, such as emergency repairs. A little preparation definitely goes a very long way!

  1. What location should you choose?

As a homeowner, you already know the importance of location when it comes to purchasing a home. This doesn’t just include your current needs, but your future circumstances, too. The right location can also add real long-term value to your investment, should you decide to sell or rent it out in the future. GO Homes build in some of Perth’s most sort after suburbs giving homeowners long-lasting value.

Here are some of the main features to look out for when choosing a suburb to build your second home:

Access to public transport: From heading into work, to enjoying a night out with friends, having a reliable public transport system close to home is so important. It’s also a very attractive option for renters, too.

School catchment zones: Rental demand can be higher for homes that fall within catchment areas for higher-ranked public schools.

Retail and hospitality: Having good shops, cafés, restaurants and even local bars nearby can really add value to your investment. Even better if they’re within walking distance (or a couple of bus stops away).

Proximity to employment hubs: Nobody likes spending hours in gridlock traffic every morning to get to work. As well as good public transport links, it also helps to live close to major employment hubs to help offer a more attractive work/life balance.

Open spaces: As the average block sizes in Perth get smaller, having lots of natural amenity on your doorstep can help to compensate for this. Think family parks, bushwalking trails, or even the beach – they can all make a huge difference to the value of your home.

Future development

Make sure to keep an eye out for any future developments planned for suburbs you’re interested in, like new schools, shops or transport.

Chat to our knowledgeable team for specific details on your desired Perth suburbs.

  1. How can you get started?

As a highly experienced second home builder Perth, we’re ready to help you GO for it. We hope this second home buyers guide has given you a lot to think about – and we’d love to help you take the next step.

To see what’s possible, make sure to view our extensive range of house and land packages, or be inspired by our display homes across Perth. With designs to suit every style and budget, we can help you find the right home for you.

Don’t wait – GO for it! Chat to our friendly team now.