Our experts share their strategies
With property prices quickly moving out of reach for the average Sydneysider, buyers are learning to be flexible with their approach to home ownership.
Strategy 1: Be stubborn about your goals, but flexible with your methods
Home buyers, particularly young professionals, readily admit that they can’t afford to buy in their ideal location “yet”, and most are willing to compromise on location in order to get their foot in the door.
The ideal home, doesn’t necessarily have to be the ONLY home purchase you will ever make, and compromising for an apartment or location is the first place to start. As you wait to save for a deposit on your “ideal” location, prices continue to surge and there is a real risk of being priced out of the property market.
In a rising property market, purchasing real estate allows you to build equity over time and grow your overall investment.
On the other hand, you will need to consider whether compromising on location will affect your lifestyle, and how much of your lifestyle you’re willing to compromise for your wealth building strategy.
Strategy 2: Lean on your parents
Let me first start by saying, I know this option will not be for everyone for a number of reasons. There a multiple ways parents can help with the purchase of your first home, not just with a full guarantee on your home loan. Consider alternative forms of parental assistance available.
Most parents may not be in a position to help with the home deposit, but they may be able to assist by helping you to avoid expensive hidden costs such as Lenders Mortgage Insurance or via partial family guarantee or simply avoid the cost of rent by staying home longer, while implementing a strict savings plan to avoid losing sight of your long term goals.
Strategy 3: Off-Plan Buying
This strategy requires due diligence to ensure you minimize your risks, as it involves buying property before it has been built or completed. Make sure you research the developers thoroughly to mitigate your risk. Buying off plan allows you to take advantage of government grants and incentives, and also purchase property with a minimal deposit (5% - 10%) and provides time to save (6-18 months i.e. construction period). Most times this can act as a motivating factor to save harder and smarter.
Buying off plan allows you to take advantage of government grants and incentives, and also purchase property with a minimal deposit (5% - 10%) and provides time to save (6-18 months i.e. construction period). Most times this can act as a motivating factor to save harder and smarter.
For more benefits and information on New Property purchases please click here.
Strategy 4: Power in numbers
Consider whether you can team up with a family member, friend or colleague who have the same goals as you. Keeping in mind, that goals and circumstances can change, so be sure to outline financial goals, responsibilities and exit options.
This purchasing option is growing in popularity, as it allows you to venture into a property that you otherwise may not be able to afford on our own. A partner helps ease the pressure of saving the entire deposit on your own, and boosts your borrowing and servicing capacity in a dual income loan.
Furthermore, consider your options of buying as Tenants in Common, rather than Joint Tenants, to allow each tenant to sell their real estate proportion
Strategy 5: Become a ‘Rentvestor”
This strategy allows first home buyers to enjoy the generous tax concessions available to other property investors in Australia.
As a “rentvestor” you can live as a tenant in a rented property, whilst being a landlord of a property that you own and rent out.
A growing number of young Australian’s have decided to take up this option as they understand how hard it is to outbid an investor who is aided by tax concessions that first home buyer owner occupiers are not eligible for. This strategy may allow you to buy sooner, as you may be able to afford a property in a cheaper area without having to compromise on where you need to live for employment and other lifestyle purposes.
Strategy 6: Ask for help
Buying real estate is one of the largest purchases you will ever make, and with it comes a very high level of risk. It’s an expensive mistake to make with your own hard earned money, or worse, borrowed money.
The market is flooded with agents on the sellers side, make sure you have someone on your side that understands property, understands selling agents tactics, suburb profiles, market changes and data.
Buyers agents are expert property specialists that represent YOU in the buying process. They can navigate through the smoke and mirrors to identify the ‘air and logical price of a property, negotiate on your behalf to get to the best price, leveraging their knowledge of the area and the market to ensure you don’t pay too much.
Be sure you devise a strategy in place for:
If you don’t have plans in place, you are at risk of being in a reactive position and paying too much.
Professional Buyers agents locate, negotiate and secure properties for a living, and often ensure you’re making the right choice for you. To find out more www.searchfindinvest.com.au click here
Address: Suite 1512/83 Spring Street Bondi Junction 2022
Postal Address: PO Box 2192 Bondi Junction NSW, 1355
Telephone: 1300 132 970
E-mail: info@searchfindinvest.com.au
