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Creative Ways to Buy Your First Home

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No, it doesn’t involve eating baked beans on toast and living at your parents’ house for three years. There are other ways you can get into the property market without completely sacrificing your current lifestyle.

But you’re not wrong to feel this is unachievable – 31% of all Australian households have very little capacity to save after they’ve paid for their regular living expenses. So, buying a house? That seems like a pipe dream.

The Australian Housing and Urban Research Institute Report revealed in a recent study that if you’re earning between 40-80K, you’ll only be able to buy in an outer suburb, under 40k, it’s rent game for you. Only when you’ve cracked a 100k+ will you have a chance to buy in the inner city or middle suburbs. But even then it can be a challenge.

It’s time to think creatively.


So maybe you’re currently living in a share house or apartment in the city. You don’t want to give up that lifestyle to become and homeowner and you haven’t made your millions yet. This could be perfect for you. You buy a property in a cheaper area where you may not want to live, but you can continually rent out your property. You keep your lifestyle, while becoming a property owner. In some cases, the rent will cover the mortgage, so it’s a no brainer really. If you can just save that 20% deposit, you’ll be set. The last election saw Australians retain the option to negatively gear their properties, so if this policy remains, there’s not too many disadvantages to this option.


Your first property isn’t your forever home, remember that. You can get into the market by buying an apartment first. You may not get as much space, but you may get to live in a much cooler suburb. Just be sure to check the body corporate rates, some can be excessive and can eat away at your investment.


You could opt for something even smaller than an apartment – a tiny home. These homes have moved from novelty to reality for many people. If you’re okay with living your life out in the world and having a small sanctuary, this could be a great option. They have everything you need, they’re tidy as can be and many use less power, so they’re great for the environment too. New tech advancements are enabling many of the construction materials to be 3D printed too, so these homes can be created with a very small carbon footprint.


If you’d like a little more space and are happy sharing, perhaps you’d like to consider a home collective. Many young people are pooling their cash, co-financing a mortgage to share ownership of a property. Obviously, this is a big commitment and will involve a level of trust and probably a whole lot of legal documentation, but you may really appreciate a great sense of community – not just a home. There are companies that help manage these kinds assets. They’ll help you and your little community have shared access to all kinds of things like barbecues, rumpus rooms and veggie patches.


It’s kind of like, rent, try, buy. Basically, it allows you to start living in the home you want to buy before you’ve saved your deposit. The seller helps the buyer by letting them rent them home first until they can qualify for a bank loan. This means you can move in without those big upfront costs and can agree on the property price from day 1. If you decide to buy, the price you pay is contractually set and the rent paid reduces the remaining balance. You can of course to decide not to buy and walk away.


It’s not everyone’s cup of tea and it could involve a hefty commute if you’re a city worker, but some people love the slower pace. You may be on a the train or in the car for a couple of hours each day, but you will get more space and probably more peace and quiet. There’s lot you can get done on your train commute anyway. You may love it. I think we’ve all proven we can work effectively remotely now, so perhaps it could be a trip in only 3 days a week.


The great thing about investing in ‘undesirable suburbs’ is they aren’t always undesirable and many of these areas see exceptional price growth. Cheaper areas are more attractive for young people and over time the demographic of the area can change making it one of the hipper suburbs to live. Owners renovate their homes, new cafes and shops come, and before you know you have a Surry Hills in Sydney’s West. Of course, this may not happen overnight, so you may want to try a rentvesting option in one of these suburbs, if you don’t want to sacrifice your lifestyle.


So, there you have a bunch of options, but the options really are limitless. Just find one that suits you, create a savings plan and stick to your guns. You can be part of the property market, just back yourself.

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