● Assess your future income capabilities and buy property within your means.
● Plan your usage of HDB loans and private loans wisely.
● Your first house is unlikely to be your last house. Never buy property with the intention of staying there forever because you can never predict the future.
Do not buy the wrong property, especially your FIRST property.
Many first-time buyers who just hit their late-20s or early-30s always come to me for advice on what to buy and where to buy. I have realised that it is this age group who most commonly makes mistakes since they often rely on advice from their parents which is outdated. The markets have changed. If you look at the property price indices, HDB resale prices and private residential property prices have dropped substantially since their peak.
Know your capability
Some first-time buyers have a lot of income but they choose to purchase a BTO flat and spend more money on renovations. On the other hand, there are some first-time buyers who squeeze their income dry, don’t receive a stable income and are still trying to pay off their existing debt. But they still want to buy a condo.
Understand your future: How much growth do you see in your career? When you buy your first property, you should be very assured about your financial situation and feel comfortable with making the purchase.
Plan your loan correctly
If you are going to buy a HDB flat, you need to determine when you will use a HDB loan and when you will use a private loan. If you are using a HDB loan, you should buy a bigger unit because you can only use the HDB loan with the full privileges once (90% loan, use CPF, no cash down payment etc.). If you are not getting a bigger house, I recommend taking a private loan and keeping the HDB loan for upgrading purposes.
Know your age
Many first-time buyers have the misconception that their first house will also be their last house. But there are so many factors to consider: work arrangements, family size and lifestyle changes. Even if you are not buying the property with the intention of earning from it, never buy blindly. If you buy the wrong property at the wrong time, you may make a big loss and even experience difficulties selling off in the future.
Choosing the right property for the first time is important because it allows you to make your first pot of gold. Without your first pot of gold, it will be extremely difficult to make your second and third pot of gold in the future.
Hence, it is important to plan five to ten years ahead and avoid taking too much risk with your first property.