With prices of Australian homes sky-rocketing, many wannabe home buyers are finding it difficult to break into the market.
Numerous home buyers feel its near on impossible to save the needed deposit to buy a house. But, with a little forethought, home ownership can be a reality. Let’s look at some tips to get you started.
BUY IN AFFORDABLE AREAS
Rather than searching for the property you want, consider buying one in an affordable area. This strategy will enable you to get your foot on the property ladder. Then over time, your investment will appreciate. Later, you can either sell this property to fund your next purchase or keep it as an investment.
DO YOUR HOMEWORK
Research the market before buying and seek out affordable property in growth areas. In addition, look at council documents and planning to find proposed infrastructure and sites for other developments. Next, look at sales data over the last 6-months for these areas to find out what is affordable.
SAVE AS MUCH AS YOU CAN
When you are young you tend to spend money on material items such as new shoes and clothes.
You also tend to eat out, buy our lunches and go out with friends to pubs and clubs. But if you stay home, rather than going to night clubs or buying clothing, then you can save more.
However, the key here is to save but leave yourself with extra funds so you can enjoy life occasionally. Otherwise, you will find it difficult to maintain your savings plan.
INVEST WHEN YOU ARE YOUNG
Many thirty-somethings are able to buy in more affluent areas because they have invested when they’re younger.
Take 30-year-old Vanessa and her husband Paul for instance. Both Vanessa and Paul saved $20,000 each for a deposit for a unit. Vanessa bought a small unit in Upper Mount Gravatt for $190,000 when she was 20-years-old. Paul, on the other hand, bought a townhouse in Wishart for $160,000 when he was 21-years-old.
After buying their first homes, the couple then lived at home and rented out their properties. Anything they earned went into savings, and the rent generated by their units covered their mortgages.
Overtime, the rent the units collected were more than the mortgages, so they both began saving even more. By the time Vanessa and Paul married, they had saved enough money to buy themselves a large home in Mansfield.
The couple’s Upper Mt Gravatt property is now worth around $490,000 and the Wishart townhouse is $467,000.
Collectively, the weekly rents bring in $850.00 a week for the couple, which covers the mortgage on their Mansfield home.
ASK FOR PROFESSIONAL
If you are not sure how to invest the money you are earning, then contact a financial advisor. Financial advisors can help you set up a savings plan based on your lifestyle and income.
So, you will know exactly how much you need for a deposit, and how you are going to save this money. They can also estimate a time frame for you to save.
Want to find out how much you could afford to borrow? Then contact Anita Cowan at email@example.com or call 0417 077 017.
Anita Cowan has over 30 years of experience in the financial services industry. As an eChoice mortgage broker, Anita can provide her customers with a comparison of over 15 lenders and hundreds of home loans – cost and obligation free.
Terms and conditions, fees and charges and normal lending criteria applies. This information does not constitute as advice. Copyright © eChoice Home Loans Pty Ltd 2013: ABN 61 069 528 463 & Australian Credit License 390502.