21 Apr Don’t despair if you’re a first home buyer
The chances are high that if you’re reading this blog then you’re interested in the property market. It might be that you’re already saving for a property, or that you feel as if it’s completely out of reach and that you’ll never be able to buy. It’s even harder if you’re in Sydney or Melbourne where property prices are out of this world.
1 – Save, save, save!
Just about every property journalist you’ve heard over the last few months would have run a story on how you need to save. Often it’s the older generation saying that people need to save and that should go without their avocado on toast. Of course you can certainly save. The question to answer first though is how much you need to save. To determine that you’ll need to work out where it is that you want to buy and what size property do you want to buy. It’s also worth considering what your mortgage repayments will be and work out if you could afford them. There’s no point in saving a $200,000 deposit as some people have done if you have unrealistic expectations. When you buy your first home the key is not to buy your “forever home”. The idea is that you use it as a stepping stone. Just as when you were a child you couldn’t run before you’d walked, you need to get the first step right so that you can enter the property market.
2 – Be realisitic
Often we read in the media that millennials aren’t realistic when it comes to getting on the property ladder and unfortunately this is true. The reality is that you will not own a 4 bedroom house with a pool and built in wardrobes in Bondi when you first get onto the property ladder. You either need to buy an investment property in another city, or you need to set your expectations more realistic. That means making sacrifices where location or size is concerned. If you’re a young couple, do you really need a four bedroom house with two car spaces? The chances are don’t, so be more realistic and buy a smaller property. Once you’ve entered the property market it’s much easier to step up to a larger property, section or apartment.
3 – Take an extra job
It’s easy to think that our generation has it tougher than the one before us, however this isn’t actually the case at all. Anecdotally, our parent’s generation found it just as difficult to purchase their first home and they made sacrifices. In some cases they decided to take a second job. A second job of just 5 – 10 hours a week could add an extra $200 per week, and while that might not sound like much, it is. That could put a huge dent on your mortgage repayments or allow you to more easily save for a deposit before property prices increase further.
There are so many options available to first home buyers and the fact of the matter is that you are going to need to sacrifice some of the things that you want to get your first home, but isn’t that better than paying rent for the rest of your life? Who really wants to be paying someone else’s mortgage when they’re in retirement?
Didn’t think so, so what are you waiting for?! Get saving and you’ll soon be able to buy a property.