EG, I know a friend of mine, bought a house 1+ million, parents paid the deposit, rented out a few rooms to students to help pay the mortgage.
So if Sydney homes are so unaffordable, how did u afford it assuming ur purchase was in the past 3 years?
fatboyslim on 18/02/2014 - 18:59
Comments
sure there r many homes at different price range - I'm just quoting my friend for this instance
If you buy something, doesn't it mean you should be able to afford it ?
Unless…
The friend I have who bought in the $1m+ range with a good income said:
- this wasn't their first house, so they probably had $300k deposit from past property growth
- she could do it as her youngest kid was due to start school in a few months, so no more daycare.
- she and her husband work long hours. Holidays are a week at a relatives beach shack.
I observed:
- they spend on credit. Costs more over time but lower weekly payment now.
- she changed jobs not long after to a new employer at higher pay.
I think it is incredibly risky. If either lose their job they are about 2 months from bankruptcy. That said, her parents could possibly help out in that type of circumstance, so maybe she sees it differently.
1) Start Early
1a) Save for deposit
2) Do a lot of research. a whole lot. Then add more research
3) Buy unit. Get first home buyers grant
4) "live" in said unit for 6 months
5) Live with parents
6) Rent out unit, get tax breaks, negative gear, etc, etcRepeat (2)& (5) & (6) until property mogul
First home buyers grant was changed completely in the last few years. It must be a new dwelling.
While you have the basics there, Heatseeker is right, the FHOG was changed about 18 months ago to only include new dwellings with no previous owners.
1) Budget - cut out crap you don't need, if you are serious you will sacrifice going out with your mates on the weekend to save that $200+, public transport, eat in etc EVERY DOLLAR COUNTS!
2) Start Early
3) High Interest Savings Account - make it an account you must go to the bank too withdraw from
4) Contribute to 3 as much as possible - didn't go out to lunch today? put that $15 in the account
5) Rent out and negative gear to just come under the mortgage repayments
6) Move In
7) ???
8) ProfitYup, just the basics, didn't want to write an essay.
It pays to have good credit. Just bought a new 2 bedder 600k ish. Deposit was covered by a loan. (no mortgage insurance needed ) Rest on mortgage. Should come out ahead after the deal.
The real trick is to sacrifice and invest while you are still young. It's harder after you pop out a couple of kids.
We lived with my outlaws and saved like crazy. Even then they offered to go as guarantee to avoid LMI.
Deposit is always the hard part, so you sacrifice and work hard. Figure out how to trim costs (buy lunch parts for supermarket and make your own instead of take away, or left overs can save you up to $50/wk if you are smart).
Reduce or eliminate take away dinner and plan your meals for the week to used up ingredients while fresh. Bulk buy non-perishables when on sale.
Don't impulse buy.
Pax
Find a 200k+ job, don't buy frivolous stuff (I didn't ended up getting a C63…that's a sacrifice), I haven't had a single holiday or taken time off for the last 6 years, started saving early.
What I would do differently if I had my chance again - I'd go buy an unit in Ryde/Dundas/Macquarie Park back in late 1990's/early 2000's for $150k. I could've done it if I didn't blew all my cash on cars and chicks. That would've saved me a few years at least not to mention a de facto getting a fair whack out of me as well. Then again if I had bought that place, the de facto would've got half of it so back to square one…meh.
20/20 hindsight… lol
Makes me depressed too. Like those old 2 bedders unit right behind Westfields in Hurstville, 5 years ago they were around $270k. I thought stuff that it's overpriced. Low and behold they're now $600k+…
Or the other pair of semi's in Adelaide, I think went for less than 200k…now $250k and that's like 6 months ago. I chickened out didn't buy them as it's close to the Holden factory and the writing were on the wall.
Or those ex-houso houses in Cartwright. High 200k's. Now mid to high 300k's in the space of 2 years. I didn't buy it because I had enough living in 2170 let alone buying IP's in 2168 which is 15 minutes away.
Or I got rid of my units in Mount Druitt, right before it freaking took off. Still made 5% after tax and expenses and it's a real eye opener with those tenants on welfare.
I could go on and on and on…
Sydney also has lots of high paying jobs….
its fairly common for combined incomes over $200K
ha ha.. so everybody has to work their butts off to get a ride in the property ladder.
The funny thing is: it seems all my friends are getting help fr their parents to pay for their deposits. they prob have jobs to support the approval of the mortgage, but not so sure what will happen if Interest rate starting to go up.
Not everyone's born with a silver spoon in their mouth unfortunately. I bloody wish my folks would buy me an euro while I was uni so I don't look like a povo POS from the west.
I just didn't like renting - I hate periodic inspection, I hate the uncertainly that the landlord might be selling up, I hate it I can't do anything do anything to the house, I hate it when the landlord is selling up and need to work with them for open houses, I hate going through the whole rental application process, I like to stash my yard full of project cars that I'm working on (last count 8 in the yard, another 3 up the front along with the daily drivers), I like a hoist mounted in my car port 3 phase electricity supply and all, I like to own a dog or three…just things you don't get in a rental.
You can buy a place in Sydney for less than a million…