5 questions to ask yourself before you invest in property

As financial decisions go, the choice about whether to invest in property is as big as it gets. After all, it’s a choice that goes beyond bricks and mortar and has the power to shape your financial future. While there are risks and rewards associated with both renting and buying your home (click here to read why renting may be a better long-term investment for you), there will be a right answer for you.  With so much to think about, here are Fearless Girl Finance’s top five considerations to make the best possible decision for you.  

5 questions to ask yourself before you invest in property 

What are my long-term financial goals? 

Reflect what you really want to achieve by buying a home. Are you aiming to build equity over time? Is security and stability a priority in your financial plan? Consider whether homeownership aligns with your financial objectives, such as wealth accumulation, retirement planning, or investment diversification – is owning your home a stepping stone towards achieving these goals or does it limit you? 

Can I afford the upfront and ongoing costs of homeownership? 

Buying a home involves more than just the sticker price. Evaluate your financial readiness by assessing your ability to cover expenses like a down payment, closing costs, mortgage payments, property taxes, insurance, maintenance, and repairs. Really be honest with yourself about how long you could cover those costs if you were to lose your income. If you already maintain a strict budget, you’ll need to add a ‘sinking fund’ for unexpected repairs that could annihilate your savings. Can you cope with that or is your budget already stretched? (If so, click here to find our top tips for making your budget go further)  

 Am I comfortable with the responsibilities and commitments of homeownership? 

It would be amazing if you could save your down payment, go through all the paperwork and then settle into a comfortable life in your new home without ever having to lift a finger. Sadly, life ain’t always so sweet and if you want to become a homeowner, you will have to accept that responsibility that comes with that. From regular maintenance jobs to emergency repairs to managing property tax and insurance, if you are making the transition from renting to buying, you need to really assess your readiness whether you have the time, resources, and willingness to handle this commitment.  

Does the location help me to thrive? 

Before you start daydreaming about floor-to-ceiling windows and a garden you can pass lazy summer days in, get to know the area first. Research housing market trends – is it a buyer or a seller’s market? Are house prices stabilising or are they on the rise? Understanding the market dynamics will help you to assess the investment potential if you ever decide to sell.

Equally as important, does the area meet your specific needs? Include local healthcare and transport, as well as entertainment in your analysis. It’s worthwhile bringing a friend and spending an ‘average day’, so you can really judge whether the location fits your lifestyle. Practice the commute – if it makes you want to scream, consider a location closer to work, even if it doesn’t have that gym-and-coffee culture you really wanted.   

Do I value flexibility or stability more? 

If you thrive on the knowledge that you could realistically pack up and move across the country over a weekend, owning a home may not be for you. Do you yearn for new opportunities or deep roots in a community? These preferences are profoundly personal, and while the permanence of staying in one place for years might fill one Fearless Girl’s soul, it could make another itch with a sense of constraint. Really think about why you want to buy a home – is it because it feels like the next step or because everyone else is doing it? If so, check out our article about why renting could be a better long-term investment than buying – and embrace your free-spirited nature.  

 

Are you deciding whether to rent or buy? Have you come to a decision by going through the 5 questions to ask yourself before you invest in property? Let us know in the comments below or tag us @fearlessgirlfinance_ on Instagram!