Understand your budget for buying land and building new

One of the biggest and most overwhelming elements of buying land and building a new home is understanding your finances, what you should spend money on and where you should save.

Questions like how much can I borrow? What should I pay for the land vs put aside for the home? Or can I afford to do it at all? Are all normal questions to ask yourself and as one of the biggest investments most of us will make it deserves some conscious thought and planning before committing to purchase.

Here are a few tips to help you along the way:

Know your budget

Make an appointment with your bank or finance lender, or even better a few so you can make sure to find the right fit for you! They will help you work out what your borrowing power is, find the right lender and rate for your personal situation and can provide you with tips on budgeting and saving for a deposit.

Do the research

Online is always a great place to start but nothing beats walking through a display village. You can walk through multiple homes from multiple builders all in one place! Whilst this might sound overwhelming walking through all the different layouts is actually very helpful in helping to work out what type of home you actually want and need. It is also very important when comparing homes from different builders to review the inclusions and any extra costs. Every builder structures their quotes differently, so it is important to review these in detail to make sure you aren’t hit with any surprises down the track.

The right choice for you

Whilst we might all have a dream list and would love to have the best of everything, for most of us it simply isn’t realistic, it is important to work out what your non negotiables are and what you are willing to let go. For some it might be you want the big house and are happy with a smaller yard and for others you might prefer a smaller home with more outdoor space. It all comes down to personal choice and how you like to live your everyday life and what will make you happy. Once you have your list of what you will and won’t settle for it helps cut down the choices and make it easier to know what you are looking for when you visit a builder or sales agent for your land purchase.

Time to save

One of the biggest benefits to buying land off the plan is the added time you have to save. Unlike buying an existing home where you need the deposit and all the funds upfront this is not the case when buying land and building new. When you buy land you are only required to deposit and exchange on a small percentage of the total sale amount and don’t pay the rest until the land registers. Depending on when you purchase this could be 3-18months away giving you ample time to save any additional funds you need in order to build your new home.

Whether it is your first home, second home or an investment, buying and building new is different for everyone the best advice we can give is to do your research and always make the choice that is best for you and your circumstances and not someone else.