First home buyer hacks: new ways to get on the property ladder
Let’s face it, it isn't getting any easier getting on the property ladder. Thanks to bargain basement interest rates, a steady influx of eager overseas investors and insatiable local demand, everyone wants a piece of the pie.
Knowing a first home buyer (on an average salary) could take over a decade to save for a 20% deposit on a median-priced house in Sydney is disheartening. If you are feeling a little overwhelmed at the prospect of renting for life, don’t despair. You may just need to get a little creative.
How? Well, here are three ways you may not have considered...
Buying with others (typically parents, siblings or a very close friend) has its pros and cons. Sharing the cost of a deposit means you might be able to buy now. You can also split all the ongoing costs of owning a home, and hopefully be able to afford your own place in the not too distant future.
But... you need to be sure about the person you co-buy with. How like-minded are you? And what happens if one of you want out of the arrangement? Think about all the worst case scenarios before and set some ground rules before you take the leap.
Invest + rent
This option is really taking off. Buying an investment property while renting can make sense if you can’t afford to buy where you want to live. Renting also gives the you the flexibility to move on if your lifestyle changes, or you just feel like a change of scenery. And if you can convince your parents to put you up, you might just get away without paying any rent - and save a pile.
But… renting is not for everyone. Leases are often for 12 months, which doesn't give you much security of tenure. And you can’t renovate a rental and put your personal stamp on your home.
Many of us have a idealised view of our first home. In this market you need to take off the rose-tinted glasses and get real. It is called compromise. Look at more affordable areas, consider a unit or townhouse over a house. It could be all the difference in getting you a crack at owning your own home.
See, there are options. Owning your own home may not be a pipe dream.
For insider tips on buying your first property read our article on what the banks won't tell you.