How to get into the property market
In today’s economy it’s no surprise that Australian homes are some of the most expensive in the world. Many of the younger generation deem buying property as unaffordable and out of reach.
But we still want a piece of the Australian dream and property investing is still a wise financial choice long term.
The plus side is interest rates are at record lows as well as loan options being readily available with so much competition in the market.
But don’t despair, home ownership may still be within your reach. Here are some tips to get into the property market that you may not have thought of!
- Buy with your parents or friends. This option is a way to get a step into the property market by pooling finances and deposits together as well as making repayments more affordable. Just ensure you get legal advice to ensure the right ownership structure to avoid issues down the track such as selling.
- The Shared Home Ownership Scheme (for those in WA)
This is a scheme offered by the WA state government. For as little as a $2000 deposit or 2% of the purchase price, the scheme enables the purchase of a newly built off the plan property using a state government loan. The government retains part ownership of the home but you have the option to buy and sell when you please, and eventually own the property outright. In other states there are companies such as BRICKX where you can buy “shares” in a property much like shares.
- Buy an investment property first instead of a home to live in/ family home. By renting out your investment property you will be able to build a portfolio faster. Regional investment properties are a great option as they can be cheaper with better rent and yields. It could even be a cash flow positive investment that puts money back in your pocket or if it does make a loss it could reduce your taxable income. Ensure you speak to your accountant and get advice with the right loan options.
- Consider a Bridge Loan
A Bridge Loan is a short-term loan to a buyer who is typically in the process of both selling and purchasing or developing real estate. It could be a useful option to not miss out on a property that’s currently on the market.
- Other types of property investment
Other options could also be investing through superannuation or a managed fund. Again ensure you speak to the right professionals to make the best property decision for you.
Saving a deposit for your first home and getting on the property ladder can be a challenge with current house prices, but there are alternative ways of achieving your goal and starting your investment portfolio.
Contact us today to discuss the right loan and potential property investment strategy for you.