3 ways to get onto the property ladder
It’s no secret property prices have risen, but wages have comparatively stayed the same making it hard for first time home buyers to step onto the property ladder. We’re here to tell you it’s still possible, you just need to think outside the box.
Team up with a mate
It’s becoming increasingly popular for young, single people to team up with their mate and combine incomes. A single salary may not be enough to save a deposit, but buying with other people effectively doubles your income. Buying with friends is not without risk, so it’s important to be clear about who is responsible for what. Experts warn that although you only own half the property, you are liable for 100 per cent of the debt, so if you’re mate doesn’t meet you half way on repayments, you may find yourself in some trouble. Another risk is joint ownership impacting on your future goals, particularly if you want to start a family down the track. Your borrowing capacity greatly reduces as the bank will assess half the asset but 100 per cent of the debt.
Borrow from your parents
Depending on your family’s personal circumstances, your parents may be able to release equity from the value of their home and lend you money, providing you with the necessary deposit to buy a house. Our parents’ generation has benefited significantly from the rising house price, so may be willing to help out. If you’re having trouble convincing your parents to do so, try quoting Malcolm Turnbull, when he mentioned wealthy parents should “shell out” and buy their children a house, providing a bit of intergenerational equity. Keep in mind, that your parents are there to help you step onto the property ladder, you will still have to do the climbing and meet your mortgage repayments.
Do your homework
You may need to look at other areas in which you live, work and socialise to make buying a possibility. Keep in mind that more affordable areas do not normally mean lower quality. For example, some suburbs may be more expensive as they are closer to elite, high performing schools. If you are in your early 20’s and are not buying to cater for school-aged children, these high priced suburbs should not be a priority for you. If you're looking at suburbs which you aren’t too familiar with, do your homework on any planned developments which may improve the area. Shopping centres or train lines could be a few years away, but these are the local perks which will add value to your property overtime.
Looking to buy? Check out Coronis' current house listings here.