Continuing from our latest article, "How the next generation of home buyers can enter the red-hot property market - avoiding FOMO", we addressed how those looking to make their property debut are often priced out of the market.
Buying a home is the great Australian dream, these days, with a red-hot property market, you may have to get creative with how you do it...
The urge, "I need to buy a place", is a key motivator for 18-35's to save for that deposit. Now, unfortunately for those looking to make their property debut, times (and prices) have certainly changed. A hot property market may make the home and location you have always had your heart set on seem unreachable.
An option to consider entering the property market may be a strategy called Rentvesting; rent where you want to live and buy where you can afford.
As the name suggests, the idea is for individuals to purchase property in a more affordable location and rent a property where they would like to live. Like everything, there are pros and cons against this strategy, but if affordability is an issue, this can prevent you from overspending. After all, you can't eat your home.
+Purchasing, where you can afford it, will often mean the size of the deposit needed is smaller and won't take as long to save.
+ Purchasing an investment property and placing tenants means you will start to generate a rental income that you can put towards mortgage payments.
+Unlike owner-occupied property purchases, loans for property investment purposes are generally tax-deductible.
+By renting where you want to live can promote positive lifestyle factors such as living close to the city, the beach, or family.
Speak to a professional:
Suppose you have found yourself still saving for a property? Perhaps you lost sight of property ownership altogether? Rentvesting may be a solution to leap into property ownership, finally!
Time to chat with a mortgage broker. It's not just about going to any broker, though. You need to find a broker that cuts through all the banking and finance jargon and provides super clear advice to know where you stand financially and what you can afford.
Snagging a deal:
Found the right place? Congrats!
If you got yourself a contract of sale, you should now be engaging a solicitor to review and advise you on both the contract's contents and, most importantly, your rights and obligations as a purchaser.
More on our blog:
Keen to find out more? Read our 3-part blog series, "Buying a home", where we detail how this process unfolds and how to navigate it with the help of a property law team and conveyancing service.
Rentvesting could be a more affordable way to enter the market by making a smart investment decision rather than one based on lifestyle or emotional factors.
Buying or selling any property is a big decision and can be an emotionally high and stressful process. You could make some costly mistakes if you do not correctly interpret the terms and conditions of the sale. When purchasing a property, you should consult with a property lawyer who can work with you to ensure you are fully informed when negotiating all of the nitty-gritty stuff.
What we can help you do:
The specialised team at CPC Lawyers can help with:
· Advice on your contract of sale.
· 'Cooling-off periods' rights
· Advice on waiver of 'Cooling-off periods' (Form 3)
· Advice for meeting lender requirements.
· Advice with regard to building contracts
If you are seeking advice on property law, call (08) 7325 0219 to book an appointment with one of our experienced solicitors today.
The information provided on this article is general in nature only and does not constitute personal financial, or legal advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website, you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.