Buying a piece of land to build your house on or sell in the future is a huge financial decision. Although investing in land is one of the smartest choices you could make today, it also involves a long process of preparing yourself financially, so you won’t have to worry about any hassles later on.
If you’re ready to take the first step buying Australian or Deanside land for sale, here are some tips that you can follow:
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Know where you stand financially.
Investing takes a lot of commitment, so you need to know your current financial situation first before you could dive into buying land. Put together a simple financial statement that lists your assets, debts and savings to know exactly how much you have and if you’re capable of putting money into a huge purchase such as a piece of land. Your financial statement will also serve as your guide in knowing what part of your income to allocate for saving up for that down payment.
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Know how much you can pay.
Now that you have a clear picture of your financial situation, it’s time to decide if you will pay in full, half or partial for the piece of land that you want to buy. If you have enough money to pay in bulk for this big-ticket purchase, then, by all means, go for it since it will lower down—or eliminate—your monthly payments. But if paying in bulk means depleting your savings and rainy day fund, then it’s best to pay only what you can conveniently afford and take out a loan that you can repay within a couple of years, as long as the interest rate is low.
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Know about your credit score.
In most cases, you’ll be taking out a loan to pay for your purchase, and your credit score would be one of your most important requirements. The average credit score is at 700, but most financial institutions and lenders would easily approve applications from clients with a credit score of 800 and above. The lower your credit score is, the harder it would be to secure a loan from a reputable lender. If you do get approval, you might suffer from very high-interest rates, so it’s best to sort out your debt problems before taking the plunge into investing in a piece of land.
Finally, you need to determine how much you need to pay for the down payment of the land you’d like to buy. In most cases, a land loan would require at least a 15-20% down payment. But the more money you put towards your down payment, the higher your chances are of getting approved for a loan without worrying about high-interest rates. So before you decide to make this big purchase, it’s very important to save up for your down payment first to make the rest of the buying process easier and not hurt your finances by paying high-interest rates for a long time.
With these tips under your belt, you can invest in land with confidence. Above all else, trust the advice of the professionals, listen to your gut, and you’ll be happily investing in no time!