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My partner and I recently sold our first home and bought our dream home. Here’s some advice for others looking to purchase a house that they know won’t be their “forever home.”
We bought our first home when I was 25. You can read all about that in my other blog 😉. When we started house hunting, we knew realistically that the first house we bought wasn’t going to be a house we stayed in for long. It’s all about getting on the property ladder, right? We always had a rough goal: purchase a house by or around 25, live in it for approximately five years, then either keep it as a rental or sell it and upgrade.
When purchasing our first home, we only had a 10% deposit, and our incomes were pretty low, so we didn’t have a huge budget to house hunt with. Our maximum purchase price was $500,000.
"It's not always easy finding the right house, so sometimes you will need to make sacrifices."
Keeping this five-year goal in mind, here’s what we looked for:
My partner is a builder, and I’m pretty good with a paintbrush, so we looked for something that didn’t need major renovations (so we didn’t have to sink a heap of money into it), especially in the kitchen or bathroom. We wanted something that didn’t need a reroof, seemed warm and tidy, but something we could do some easy renovations to, ensuring we got our money's worth when we sold or that would potentially make a good rental. We knew we couldn’t look for the type of house we wanted close to Wellington as they were out of our budget.
"If you are a first home buyer, it is a great idea to sit down and make a few goals and a wish list."
Our other “wish list” items were three bedrooms or two with a studio or sleepout. We figured a property like this would be easy to have as a rental or resell as it would be suited for a small family, an older couple, or someone wanting a boarder to get some extra income, or maybe someone who worked from home and needed an office.
We looked at a bunch of houses in Levin, but none really ticked the boxes, and we ideally wanted to live in Otaki. We knew we had a pre-approval for a maximum of six months, so we could take our time.
"We always had a rough goal: purchase a house by or around 25, live in it for approximately five years, then either keep it as a rental or sell it and upgrade."
We ended up finding a two-bedroom property in Otaki that was off the street, down a long driveway (private), had two bathrooms, a tidy kitchen, and a sleepout. Bingo!
"Your first house may be the one that simply enables you to get the one you really want down the track. And when you have that mindset, you become less attached and more able to make sound decisions when first starting out."
After living in the property for about four years, we had done quite a bit to it. We had taken out the carpet, put down floorboards, painted the rooms, created feature walls, renovated the sleepout, tidied the gardens, bought a spa, and made the decks a bit nicer with stain. We had roughly kept in mind that the five-year goal was coming up!
In this job, I look at houses all day, every day, so I spend a lot of time on Homes.co.nz. One day, I was having a look around my area, as you do, and saw a house that was in a town slightly north of our current house that ticked every single box as a dream home for my partner and me. So I said, “I know we said we wouldn’t move further north, but… look at this house.” To their surprise, it was in our budget, and they really loved the look of it. So, we organized a viewing, and after a couple of weeks of going back and forth with offers, we had our offer accepted!
We had our offer accepted and gave ourselves one month to have our house finished and on the market. It was a hell of a month! As I said earlier, we had roughly kept the five-year goal in mind. However, we had no skirting boards for the last few years since we did the floorboards, we had a leak recently that we needed to fix a wall and relay the floorboards. The gardens needed a tidy-up, a couple of areas of the fences needed to be painted, and the cladding on the front of the house needed to be replaced and painted.
"After living in the property for about four years, we had done quite a bit to it."
We put in some big shifts on the tools, getting the cladding on two sides of the house pulled off, replaced, and painted all in one weekend. We spent our time after work painting all the skirtings and doing as much gardening as possible until nightfall.
We got photos done on a Thursday, our house was listed on Friday night, we had our first home open on Sunday, and an offer on Monday! We couldn’t believe it. Our house was selling, and we were getting closer and closer to owning our dream home. Everyone at work was very excited for us, but we refused to get excited, just in case it all fell through.
Both houses went unconditional, and we settled in January. The best feeling was knowing all our hard work of renovating, paying extra on the mortgage, buying the right first house at the right time, etc., had all paid off. It was hard work, but we think we are extremely lucky that we had a great first home and our dream home popped up when it did.
"The best feeling was knowing all our hard work of renovating, paying extra on the mortgage, buying the right first house at the right time, etc., had all paid off."
A funny fact: the lady that purchased our house is single and works from home. She loved the idea that she could have her office in the sleepout and still have a room for friends and family to sleep in. She also liked that there was another bathroom, in case anyone needed to move into the sleepout in the future, they had their own bathroom.
If you are a first home buyer, it is a great idea to sit down and make a few goals and a wish list. Are you wanting your forever home now (is that even possible) or just to get on the ladder? Will you sell it in the future to buy your second house or keep it as a rental? Are you wanting to do significant renovations (do you have the cash for that?) or buy something that just needs a lick of paint? Should you spend slightly more for a property that needs less work, or slightly less and use the rest of your money to renovate? Should you purchase “the worst house on the street” or a better property in an up-and-coming area?
"Always ask for help! Ask a financial adviser, real estate agent, or friends and family what they think would be a good property for your goals."
It's not always easy finding the right house, so sometimes you will need to make sacrifices, whether that be to wait and save more, get something with fewer bedrooms rather than more, etc. Your first house may be the one that simply enables you to get the one you really want down the track. And when you have that mindset, you become less attached and more able to make sound decisions when first starting out.
And that's the end of my advice! Good luck with your house hunting!
Suzanna
About Suzanna
Hi, I’m Suzanna. I am a Client Services Manager/Loan Writer for Graham Goodisson’s team. As well as Graham, I will be alongside you from the start of your house hunting journey until you find a home, as well as helping to maintain your loans in the future. It is my job to prepare a mortgage application making sure that I present you and your situation to the bank in the best possible way. I will also help you with top ups, restructures, refixes and anything else you may need. I have recently bought my first home and understand how stressful it can be, we are here to guide you through the process, helping to take some of that stress away. When I am not working, I study part time and like to spend a lot of time with friends, family, my pets and working on my house renovations.
This article was written by Suzanna and peer reviewed by our financial advisory team.
Disclaimer: Suzanna is not a financial adviser. The above is generalised information that has been peer-reviewed by the Velocity Financial Advisory team. As always, before you make any financial decisions, discuss your situation with an adviser from Velocity Financial, and seek advice from professionals, such as a lawyer and accountant, to find the best solution for your unique situation.
Always get professional advice
The information shared in this post is meant to be general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures https://www.velocityfinancial.co.nz/disclosure-statement.