Millennial homeownership solutions
With property prices skyrocketing across Australia, the conventional path to homeownership is no longer a feasible option for many Aussie millennials, but that doesn’t mean having your own home is completely unattainable.
If you are determined enough, you can find a way to achieve what you want, which includes finding a less traditional path to homeownership that works for you. Here are some tips for the modern millennial to break into the property market and achieve your goal of owning your own home.
Phone a friend
A growing number of millennials are partnering with a sibling or friend to pull their collective buying powers for the deposit and share the mortgage repayments. If you take this path to homeownership make sure it’s with someone you trust and be sure to have an exit strategy in place that you have both agreed upon to avoid problems down the track. It might even be helpful to get some legal advice.
Popular amongst millennial homebuyers, rentvesting refers to buying an investment property in a suburb you can afford and living in the area you want to live. There are many reasons you may choose to “rentvest” including the benefits of remaining close to your work and friends or even wanting to continue to enjoy a social, inner city lifestyle.
Another great reason to take the rentvesting path is that your initial outgoings will be much less. If you’re buying in a more affordable suburb you won’t need to save as much for your deposit and stamp duty, enabling you to enter the property market much sooner.
Renting out your investment property will also mean you can earn an income to put towards the mortgage repayments, plus if you are required to top up the payments you may be able to claim the amount as a tax deduction at the time of your next return.
Ask your parents to go guarantor
Saving for a deposit can seem very out of reach, especially if you have already made the move out of home and are paying rent. Ask your parents to act as a guarantor, a guarantor loan is a third party home loan that helps you to get a loan by allowing your parents or family members to use their own property as additional security. The benefit of a guarantor loan is that you don’t have to save a significant deposit so once you’re in your own place you are paying off your deposit rather than putting your money towards rent.
Boost your income
We are seeing a rise in online portals like Airbnb and Couchsurfing.com that connect those looking to monetise their spare bedroom or couch. This works well if you’re looking to boost your income to put towards savings and bills, and it offers the tenant a place to stay whether it be on a short-term or a longer-term arrangement. Be sure to get permission from your landlord before you decide to host anyone.
Convert a garage
If buying your own place isn’t an option for you at the moment but you at least want a little space to call your own, a great temporary solution (if your parents get onboard) is to convert a shed, garage or unused space while you save for a deposit.
Or if you’re purchasing a property but don’t think you will be able to cover the mortgage repayments, consider converting a space and renting it out to assist with the repayments. The rent you receive will lower the amount you need to pay whilst your home builds equity and your income hopefully increases.
When you’re ready to take the next steps into home ownership, let LoanDolphin do the work for you.
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