The Defence Force First Home Buyers Guide
01 Jul 20
Are you ready to make your move?
The hint of Government Grants becoming available over the last few months, plus the talk of some property markets softening means there’s an emerging segment of First Home Buyers in the affordable Australian Property Markets.
If you’re thinking of investing, make sure you take a look at Capital Properties Investor Tool: Australia Property Market Report.
On the go? Here’s 30 seconds of take outs:
- Government Grants have made buying a place of residence very attractive.
- We’ll tell you what you need to get started, including how much deposit you’ll need for your property, why you need pre-approval and how to choose the right property.
- Our 7 step education process is the most efficient way for you to acquire the knowledge and confidence to help you grow your financial and personal wealth.
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2020 sucks right?
Nope actually. Not for everyone. In fact, being a Defence Force First Home Buyer in 2020 has plenty of benefits!
At any other time, the cost-benefit of investing for the Defence Force property buyer will often stack up better than purchasing a principle place of residence.
In fact, up until now, the team at Capital Properties strongly encourage Defence Force members to question whether it’s better to invest or purchase a house to live in.
But the current availability of Government grants changes that. In fact, in some of the more affordable property markets it may be better to take advantage of the grants and purchase a property outside of your postal locality. To fulfil the First Home-Owners Grant and the HomeBuilders Grant residency requirement you must live in the property for a required time period. Each state and territory have different requirements.
First Home Buyer Guide
- Research your entitlements;
- Defence Force Entitlements. Knowledge is power. And we’re sharing that with you here. This previous blog post will walk you through your entitlements.
- Government Entitlements. There’s the First Home-Owners Grant. Each state and territory have different grant amounts, so check the specific office of state revenue (or Treasury) webpage for the correct details.
Then there’s the First Home Loan Deposit Scheme, aka the ‘Five Percent Deposit Scheme’. And now we have the newly-introduced HomeBuilders Grant.
- Work out what you need to get started;
- Minimum deposit. A first home buyer just needs five percent of the value of the property in genuine savings to use towards the purchase price of a property. (This amount was correct at the time of writing this blog). You will be required to show funds to complete the purchase.
There’s some flexibility around Owner-Occupier finance and lending, so many of the major banks will have options for smaller deposits. Our finance broker can help you work out the amount you’ll need in your specific situation. Contact us here.
- Still saving your deposit? Did you know that the Australian Government actively encourages younger generations to enter the property market? One of the recent ways they did this was to introduce a scheme called ‘The First Home Super Saver Scheme’. This Scheme is intended to help Australians boost their savings for a first home by allowing them to build a deposit inside their superannuation. Effectively giving them a tax cut. We can help you learn about this and share some more tips to secure that deposit.
- Minimum income. A first home buyer must show a good capacity to service the home loan. If you’re unsure of your ability to do this, take a look at our blog post on debt-to-service ratio or debt-servicing: ‘The One Property After the Other’. Alternatively, just get in touch and our finance broker will help you work out the amount you’ll need for your personal situation.
- Work your borrowing capacity. This is finance-talk for telling you to work out what you can afford to buy, or what your property budget is. Your borrowing capacity will be made up of your current assets and liabilities. Again, this is easier if you’ve got someone who knows what they’re doing. Contact us and a finance broker will be in touch to work out the amount that you’ll need for your property purchase.
- Seek finance pre-approval. Vendors (‘sellers’) love buyers that are in a finance-ready situation. If you have pre-approval, you’re in the best possible position to make a purchase quickly. Therefore, your advantage as a first home buyer means that you can negotiate on price and settle faster. This is a hugely motivating factor to a vendor/seller.
- Research your property purchase. Purchasing a house that you’re intending to live in will affect your decision-making process. It’s natural that thinking of the house as a home will create an emotional tug. But the reality is, any house purchase is also an investment. We strongly recommend that you approach this in the same way you would any other investment, i.e. do your due diligence! Here are your ‘soldiers five’ in researching;
- Economic factors. Check out this blog we did on economic factors that impact the property market: Which national economic indicators sway the property market. And for a current market overview, read this: OPPORTUNITYISNOWHERE.
- Property statistics. Make switched-on investment decisions by using our 8 property selection criteria: Switched-on Strategy Series.
- Property Demographics. Have you done your research on the demographic in the suburb you’re looking to purchase in? Here’s what to look for: Hey property investor have you id’d?
- Research your service providers. It’s best to work with someone who understands the unique set of problems that comes with being a Defence Force First Home Buyer. You’ll need a unique set of solutions, so you need a professional who understands both you and the process. For example, do any of these sound like you?
- You spend a lot of time away from home, you’re time poor and often have limited access to the internet whilst deployed.
- You may have limited resources, a lack of knowledge and don’t know who to trust.
- Even though you’ve saved money, you may be concerned about making a mistake and aren’t sure what to do with it.
We address these problems, and more, through our client "7 Step property investment process."
This process offers a complete support system, taking you through the entire investment process, including our Discovery and Strategy sessions in a time-effective manner (over 2 – 4 weeks). This helps to reduce any fears or misconceptions. We carefully match our clients with the ideal property. Then we provide the knowledge and confidence to help you grow your financial and personal wealth.
Find out more with our free Discovery Session. We’ll prepare a First Home Buyer Pack for you to take with you, which includes a copy of my book Property Investment SOP.
Let our experts help you on your way. Get in touch now.