Let’s face it – getting your foot in today’s property market can be tough.
This environment means we’re starting to see a range of new ways ambitious young people are entering the property market for the first time or growing their investment portfolios.
Co-own: Being single doesn’t mean you have to enter the property market solo. We’re seeing people team up with family members or friends to get into the property market sooner, giving them a dual income to afford the loan.
Just be sure to seek independent legal advice and have upfront discussions about how you will approach any changes in circumstances.
Rentvesting: Say you enjoy renting your inner-city home, but you can’t afford to buy there just yet and you don’t want to move to the suburbs. More and more people are turning to “rentvesting”, which is where you continue to rent in the area you want to live, while purchasing an investment property in a more affordable area. This allows you to maintain the lifestyle you want to live while getting your start in the property market.
Invest in a holiday destination: Take advantage of the rising popularity of accommodation-sharing sites and consider investing in a holiday destination to boost your rental income.
The Bank of Mum and Dad: Young people are also increasingly turning to their families to help them get their foot in the door. Assistance can come in many forms, with parents either contributing to the deposit, signing on as a guarantor, or just letting their children live at home rent free while they save for a deposit.
Fixer-upper: For many, your first home often isn’t your dream home, and with that in mind handier home owners are finding properties at great prices to fix up and resell. This may be a good strategy to give you the capital you need to buy your second home that’s closer to your dream. Look for a place that’s in a great area but just needs a bit of love, and be realistic about what you can achieve, how much the renovations will cost, and what similar properties are selling for.
Of course, as with any financial decision, it’s important to look at all the facts and make decisions based on what works best for you. It’s always a good idea to discuss your financial position with your financial institution or mortgage broker, to gain a further understanding of how much you can afford to borrow and repay.