As parents, we all want to see our children succeed in life.
But spreading their wings and flying the family nest to branch out on their own is a big move. Especially when they’re considering buying their first home.
While you might want to help them climb the property ladder, it’s important that we teach them to be independent and to understand the value of money.
So how do you allow them to find their own financial feet? And how do you minimise heartbreak and the cost of common first homebuyer mistakes?
Read on to learn 4 valuable first-home buyer lessons that you can teach your kids.
Lesson #1: Know What You Can Afford
Younger generations cop a lot of criticism for their “crazy” financial ambitions” that see many end up neck-deep in debt.
This is all too common nowadays, with so much ‘easy credit’ on offer.
The best way to prevent your child from becoming part of this statistic is to teach them how to budget, so they know exactly what they can afford.
Once they have a realistic handle on their expenses, they can work out the amount they can afford to pay on a monthly mortgage repayment.
The trick – only shop within their budget and avoid temptation from properties that are unreasonable at this stage.
Lesson #2: Budget For Every Expense
This aligns with the previous lesson.
When it comes to creating a realistic budget, you need to consider the extra costs that come with owning your own home.
First there are purchasing costs – things like legal, mortgage and moving fees.
First timers also usually need some furniture and white goods too.
And of course, there are rates, insurance, maintenance and repairs… things that don’t come with living with Mum and Dad.
And if their first home is in an apartment complex, there will be annual body corporate fees to pay.
It all adds up, so make sure they are away of these hidden extras.
Lesson #3: Don’t Buy A Palace
We all have to start somewhere.
Which is why their first home doesn’t need to be a palace. A first home is the first step on the property ladder, and what they buy can have a huge impact on the rest of their life.
Instead of purchasing the dream home, encourage them to buy something that needs a little cosmetic work. That way, they can add value, increase their equity and invest in more properties for their future retirement fund.
Lesson #4: Plan For The Future
It’s important to teach your child to plan for the future.
When buying their first home, future planning should also include market projections. What will the market look like in ten years, when they might be thinking of moving or selling?
Is the property represent a good long-term investment, as well as being a cozy first home?
This will need a bit of research on your part, but in the long term, it will benefit your child’s financial standing.
Talk To The Experts
If you’re looking for more great advice on buying a first home, consult the experts at Adpen. We’d love to help your family navigate the first time complexities of entering the property market!