Being Australian, it’s natural to feel the need to have to own property once you hit a certain age. It’s almost a tradition or a security blanket we need in a changing world where we cling to replicate the traditions we grew up with.
In 2019, the big issue with the Australian dream is affordability. Property buyers are finding themselves priced out of the property market and compromising their needs, just so they can purchase a property of their own.
If you feel like you’re in a property buying rut, you’ve come to the right place. Below are a few useful suggestions to get you into the market ASAP.
1. Buy in a suburb you can afford & rent in a suburb you want to live
The price difference in property price between the inner city and outer suburbs could be well over a million dollars. So if affordability is an issue it’s important to remember why you’re buying:
Shelter and long-term security.
Keeping up with inflation.
Over the last ten years, even the cheapest houses in metro Melbourne have more than doubled or tripled in value. Looking at this example, it’s vital to own property so you’re not priced out of property ownership as the decades go by.
So we have established the fact that it’s vital to own property where you can afford to, even if it’s not where you want to live.
If you’re not happy living where you can afford to buy, simply find yourself a local property manager and lease out the property and rent where you want to live.
2. Take advantage of a market cycle.
Real estate prices go up, down and sideways every five to eight years. When prices are moving upwards there seems to be a buying frenzy.
Buyers compete with each other to buy and in the process over pay for property. The only winners in this type of market are the property sellers. This is a terrible time to get a deal. If your budget is tight, it’s no time to buy anything at all.
When prices are moving down the whole buying market changes. Buyers have the upper-hand when negotiating with sellers. Competition disappears and prices start dropping.
The trick to buying in this market is not to get caught up in the excitement of waiting too long. The property market is most likely correcting rather than crashing.
So it’s wise to buy within a seven-year cycle and stick to the long-term plan.
3. Share property ownership.
Many younger tenants are living large with big houses in expensive inner city suburbs. How do they do it? They share the cost of renting with two or three groups of tenants.
This is a great strategy that the property owner can learn from. Property ownership can be broken up into shares over two or three families. You can purchase a large inner city lot of land and lease out the property whilst sharing the cost of ownership.
Once the property is paid off or the owners have considerable equity, the house can be knocked down and the land subdivided
The hot tip here is buying land that has the potential to be subdivided into equal lots. For instance, 3 owners = 3 lots of land, the total of all three lots should equal 900 square meters at minimum.
About The Author
Mark Ribarsky, a Bachelor of Business, is the founder of Wise Real Estate Advice & Property Manager Melb. t, a buyer’s agent and property manager.