Congratulations on your Permanent Residency! You can now stay in Australia for good and have access to social welfare benefits, the national health care, and higher education loans. Also, you can finally vote and apply for citizenship.
But perhaps the biggest benefit is that you can finally own a house. This is a prime requirement if you really want to settle. No more rents to pay and no more arguing with your landlord over bad plumbing. Just you and your dream house.
Here's the catch: owning a property isn't for everybody. Too many people have jumped in the world of home ownership without being financially prepared only to find themselves in debt. So how do you know if you are ready to buy a house? Follow these signs, and if everything is right on your part, then get that beach villa you have always wanted.
If you are an urban nomad whose job involves traveling from one area to another within months, then keep your dream house just a dream for now. Renting is the best fit for you. If you are not planning on moving in the next five years or so, then push through with the ownership.
Getting a home while constantly moving will only place unnecessary expenses on your back. Just imagine paying both the mortgage and rent, and you will dry up your resources sooner than later. Unless you are Bill Gates, do not do this.
Yes. Those years of not giving in and maxing out your credit card because the new iPhone will not buy itself has paid off. By avoiding debt, paying the bills on time, and settling your loans properly, you can build a good credit score. This is essential in determining if you can apply for a mortgage and what the interest rates will be. If you have a low score, chances are you won’t be getting a mortgage, or if you do, higher interest rates apply.
Please be advised, however, that credit score seesaws constantly, so be sure you always check yours on line (you can do it here).
Having your wedding in the next few months? Your partner is expecting? Planning to get your degree? You might want to rethink about getting a home. House ownership is all about prioritising and commitment. If the coming months or years' plans will put house payments on the back burner, don’t do it. You will waste money and will probably cause you to run into more debt.
One of the most fatal mistakes home buyers make is putting all their savings on the down payment. There will always be additional expenses coming, either the paint job is bad or the plumbing is not up to par (it’s always the plumbing). With all your money on the house payment, you won’t have much left.
Worse case is unforeseen and unwanted expenditures barreling you down: you got fired from the job (see here how you can find out if you will get the boot) or a family member got sick. If you already exhausted your unemployment or emergency fund, you will be in trouble.
And likewise...
If you only saved for the bare minimum of the down payment, then you haven’t saved enough yet. Hidden and unexpected expenses such as title insurance and inspection fees will always be coming and adding up to the final numbers which can be as high as ten percent. Have a buffer and protect yourself from unwanted surprises.
If you need a place you can call as your own, then by all means do it. If you are doing so because you are under the impression that a house is an investment that will make you more money, then we have to stop you right there. First, house market price over the course of years fluctuates dramatically, so earning significantly is not a sure thing. Second, even if you earned, the inflation and all the financial stress it brings cancels it. Be sure you buy a house for the right reasons.
Not all debts are created equal. Some are being made to lift off a business or expand an enterprise. Others are results of unsettled contracts. And sometimes they are a product of irresponsible finances and living beyond the means. If you belong to the last category, think twice about getting a mortgage. Be sure you have a good plan on dealing with your debt first. Debts are constantly increasing and if you are not consciously aware of where they are coming from, then that's a red flag. Take a step back and manage your finances.
Renting a house is no rocket science in Australia, but it’s not child’s play either. Arriving to the country for the first time, you can’t expect to own a house in just a few weeks or months. Even those who have been here for quite a while still choose to rent. Only seventy percent of the population owns their homes or on mortgage. The rest choose to rent. And why not? Renting involves less financial risks and disposes any home loan debt.
Here are six simple steps on landing your first apartment or flat in the Lucky Country.
Give yourself two to three days and walk around the neighborhood to get a good feel of the area. Take note of the important spots in your town or city like hospitals, shopping malls, schools, and parks (if you have children) to help you decide the area where you would like most to settle in.
And more importantly, take note of the windows of agent displays to see what they are offering, if they fit within your budget, and if they are in the best locations. Carry a small notebook to take note of business names, contact numbers, and prices. This will make a huge impact on your house hunting.
Make sure your flat or apartment is convenient for your commute or has a parking space if you have a car. Most renters fail to consider this factor and end up with headaches and more expenses.
In this day and age, there isn’t much you can’t do on the Internet, including apartment searching, and this makes the arduous task relatively more efficient.
Check websites like realestate.com.au, gumtree.com.au, exchangeclassifieds.com.au, domain.com.au, and craigslist.com. These sites offer detailed information regarding houses, apartments, and flats. You can also narrow the search down to your area or your preferred budget for easier selection.
Pro tip: if you have time to spare, you may do the internet searching in advance before flying to Australia. Take note of the name, email, and other contact details of the agents from these websites. Send an email to these agents containing an inquiry about the rental that you like, your arrival date, visa status, occupation, and number of people with you. This would give you the chance to outbid the other renters and/or provide a buffer on your apartment-search. Chances are, you will already have many options once you land ashore.
Once you find an available property that meets your pre-requisites, contact the managing agency and/or agent managing the property. Calling the agent through the phone is the best option. If he/she doesn’t answer or call back, send him/her a mail containing all the important details he/she needs. It’s a competitive world out there when it comes to renting, especially in big cities, so don’t hesitate in exhausting all options to pursue the agent.
In case you finally reach one, ask all the questions you have in mind, starting with the most important ones. Always be polite and professional in talking to an agent. These people are dealing with a lot of people and undergoing stress but still gives quality time when it comes to potential clients, even if it’s just as short as a five-minute conversation, so return the favor.
When putting the application, make sure you supply all the details and documents as completely and accurately as possible. Otherwise, you may lose the bid over someone who's better prepared.
The documents usually include the following:
Pro tip: Applications are better submitted before the open house rather than giving them during the event. This saves time for yourself and increases your chances of getting the property.
The agent/agency will usually hold an open house or viewing events for potential tenants (they need to, since it will be a violation of the law to rent a property that a tenant hasn't seen yet).
Visit the event so you can see and have a feel of the apartment/flat. It is another opportunity for you to find out if this really is your apartment. Be sure you comply with the house rules (don’t lie on the sofas and keep your voice down) and read the listing sheets if there’s any (these are sheets containing images, specs, and prices).
If the sheets aren’t enough, don’t be afraid to ask the agent clarifying questions, as it’s his/her job to clear any doubts and objections holding back the renters.
If you are decided to rent the place, you may discuss it with the agent after the open house, unless the agent initiates the deal already.
Now that you've inspected the property personally and you like it, it's time to sign the lease.
In Australia, it is ideal that you settle the first month's rent. Also, you will need to pay at least six weeks' worth of rent as bond for your landlord.
Functioning like security deposits, the bond safeguards the owner/landlord from any damages incurred to the property or any unpaid bills left by the tenant. In all states, the bond is kept by an independent government-owned body, except Tasmania and the Northern Territory, In New South Wales it's called the Rental Bond Board.
Prior to signing, inquire with the managing agent for any accounts set up with any utility providers to save yourself from connection fees.
Also, remember that each state has a tenant's association that aims to protect the rights of the renter for your additional support. So it’s best to find the main offices in your area.