by Danielle Dames

Created on: June 14, 2009   Last Updated: June 17, 2009

The physicality of bricks and mortar is reassuring. Being able to see your investment brings about a sense of instant gratification. 'This is mine. My investment. My house'. And there is something to be said for owning an investment that gives you a true sense of achievement.

Buying real estate is relatively easy. Buying good real estate requires research. It's a huge investment, and if you get it wrong you could be paying off that mistake for years, if not decades.

Regardless of whether you are purchasing your first home, or your fifth, there are ten steps that you should follow:

STEP 1

Finances. It's great to flick through all the glossy real estate brochures dreaming of the five bedroom three bathroom end-of-row home with the polished boards and giant oak perfectly positioned in the landscaped back yard, but if all you can afford is a one bedroom condo, those dreams will remain just that - dreams.

You need to take into consideration your financial situation. Most lenders require a substantial deposit, and even if they don't you should be aiming to have at least 10 percent of the purchase price in a savings account. If you need to lend more than 90 percent of the property value, not only will you be charged mortgage insurance, but in reality, you simply can't afford that property.

A deposit acts as a buffer, and as all too many have discovered in the recent real estate bust, will be a lifesaver if the market takes a downturn. Calculate how much money you have, there and ready to spend. Finance experts state that you should never commit yourself to repayments that are more than 30 percent of your monthly income, after tax. Don't forget to calculate in the closing costs of the property - legal fees, title searches and property inspections can easily add up. Even on a cheaper property they can equate to a few thousand dollars.

STEP 2

Standard of living. It's one thing to know how much you can spend. Now you need to realistically consider the standard of living you can afford. If you really can't bare to be in a small apartment, you may have to consider living farther out that you had hoped. Again, be realistic - there's no point if two years down the track you are pulling your hair out and fighting with your partner because you haven't got room to move.

STEP 3

Research the area. You know how much you can spend and the level of living you are willing to cope with. Now you need to find the neighbourhood that suits your needs. You

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