Upsizer Checklist: How To Time Your Move Up The Property Ladder
When is the right time to ‘upsize’ from a small property to a bigger one?
Maybe you’re ready to take that next step after you’ve built equity in your starter home, or your young family needs more space to grow. Whatever the circumstances, it’s all about timing your move. Use our handy upsizer checklist to make sure you’re ready.
❑ Create a list of long-term goals
Why do you want to become an upsizer? Maybe it’s all about giving the kids more space to play and grow. Or perhaps you’re interested in a long-term investment strategy. Do you want to build an expansive portfolio? Could keeping your current home and renting it out be more beneficial in the long run?
Being clear about your goals from the beginning means you’ll be able to overcome any hurdles with a clearer vision. It also might be wise to speak to an independent financial advisor to nail down your long-term goals.
❑ Find out how much your current home is worth
Since your property is likely your most valuable asset, its current worth can be a major factor in what type of home you buy next. The best step is to get an appraisal from a local and experienced real estate agency.
Depending on how the market has fared since you purchased it, you may have built up equity to contribute to your upsized property. Whatever the outcome, once you know your home’s value you’ll be able to build a strategy for climbing the property ladder.
❑ Work out your upsizing budget
How much can you spend on your next property? Typically you’ll need to ask your lender. Determining a budget involves more than just getting your current home appraised. It takes a number of factors into account such as your household salary, monthly expenses, number of dependents and the suburb and type of property you want to move to.
A mortgage calculator can give you a fair indication of your financial commitments, and your lender will ultimately determine your budget.
❑ Understand the current market conditions
There’s no escaping market fluctuations – sometimes we’re in a boom while other times the market cools and corrects itself. But because the property market rises and falls, and is influenced by local and global trends, it’s critical that you time your move right.
A good time to upsize is when the market is flat or falling. This is because you’ll have less competition from other buyers, and more time to get your finances in order and consider your move. Making the leap may also be easier because the percentage gap between upsizing to a new home is likely to be smaller in a flatter or falling market.
❑ Buy first or sell first?
It’s also important to think about whether you want to buy first or sell first. Selling your current home before buying a new one is the common path, as you’ll know for sure how much you have to spend. However, if you find the home of your dreams and you’re confident of a quick sale on your current home, you may decide to go down that path – so long as you understand the risks, current market conditions and are financially able to do so.
❑ Use the equity in your current home
Once you’ve got your first home, it’s easier to start climbing the property ladder – but that doesn’t mean it happens overnight. The good news is that because you’re a home owner, you’re in a much better financial position to upsize, and you probably won’t have to work as hard to save for a deposit like you did for your first home.
Hopefully your property has risen in value since you purchased it, and if it’s grown enough then the equity – the portion of your home that you actually ‘own’ – may even be able to cover the deposit for your upsized property.
❑ Prepare for bigger ongoing expenses
Upsizing to another home is an exciting time, but it’s important that you stay grounded and understand that your day-to-day costs are going to rise. Not only will you likely pay a bigger mortgage sum every month, but your utilities (gas, electricity, water) and council rates will probably get higher as well with a larger property to service.
However, if you begin your upsizing journey with open eyes, goals and a solid strategy, you’ll be able to prepare in the months beforehand to ensure it doesn’t hamstring your move.
Start climbing the property ladder
Is now the right time for you to upsize? If you’re ready to move on to bigger and better things, contact an experienced local agent today.