Timing is everything in the property game and when you are hunting for a home to buy while renting, it’s often difficult to line up the end of your lease to coincide with the settlement on a new home. In fact, it’s so difficult, I’m going to suggest you don’t even try!
Here’s why we think it can be a good idea to buy while you’re still in a lease:
- Buying is big picture, renting is small picture.
Once you are in a position to buy a home, renting becomes simply a means to an end: somewhere to live in the meantime. If you keep this perspective, you will remain focused on making a good buying decision and this won’t be clouded by a short-term hurdle.
- Prices are rising at the moment.
Over the past few years we have seen inner Sydney property prices rise between 1% and 2% per month, so if you delay starting your property search under these conditions, you risk being priced out of the market.
- It might take longer than you think.
That said, you might have 6 months to go on your lease and find that it takes you that long to find your ideal home (in fact, this is a short time-frame for some people!). Remember that even after you buy it there will be a settlement period. This is usually 6 weeks, but 12 weeks is not uncommon (you can even request this).
And then, what happens if you delay the start of your search and it takes a lot longer than you expect and instead your landlord gives you notice to vacate at the end of your lease?
- You might panic buy.
When buyers face being homeless (or a double move), good judgement can fly out the window and this is when we see people buy the wrong property and/or pay too much money.
- It might not cost you as much as you think to get out of your lease.
Often people assume it’s going to be extremely costly to break a lease, however, it’s often not as bad as they think. It’s certainly worth understanding the potential cost so you can factor this into the equation.
And in the end, getting out of a lease can be far more cost effective and less stressful than needing to sell your home in a hurry because you’ve bought something else.
So start looking, who knows, you might just find the right home quicker than you thought.
Published: May 2017
DISCLAIMER: Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.