For many younger people and first-time buyers, the current housing affordability issue is making it increasingly difficult to enter the property market.
As discussed in our earlier blog post, property investing while renting – is it and option, many young people are faced with the issue of struggling to afford to buy in the areas where they currently rent and would prefer to live.
According to information recently released by the research arm of real estate agency LJ Hooker, this has encouraged the younger generation to ‘look outside of the square’ of traditional buying trends and resort to non-traditional buying methods to enter the market.
The white paper has even coined the term ‘rentvesters’ for those who are currently renting but can’t afford to buy in that particular location.
Some are purchasing smaller and more affordable homes to eventually renovate while others are pairing up with friends or family members to make buying a possibility in the current market.
The white paper also identified a trend toward purchasing an investment property in a more affordable area and renting it out while continuing to rent where they currently live.
Also gaining momentum is young people purchasing house and land packages or buying homes off the plan. For many, the attractiveness of purchasing these types of properties is that once the deposit has been paid, mortgage repayments don’t begin until construction is complete which allows them more time to adequately prepare financially.
In this instance, if the property is then rented out as an investment property, there are a number of benefits that may provide some additional comfort for young purchasers that are not necessarily available when purchasing an owner-occupier property.
Namely, lower and more manageable weekly out of pocket expenses, smaller deposits and numerous tax benefits associated with owning an investment property.
The type of strategy you implement in order to purchase your first property of course depends on your specific situation such as your financial and employment circumstances.
For first-time buyers, not all of the methods mentioned above will necessarily be the best approach for you and that’s why it’s important to spend some time researching your options and consulting with professionals for some additional advice before taking the plunge.
We would be happy to walk you through your options – talk to us today.