Ask the experts

It’s a decent deposit but this couple may have to look further afield for a property

NAME: Alecia Green

STATUS: Married and wants to buy a property.

QUESTIONS: With an $80,000 deposit, how much can Alecia and her partner borrow? Is there a lender that is more receptive to lending to a business owner? Should they buy in Sydney or in a regional area such as the NSW South Coast, or in Hobart and rent it out or run it as Airbnb? Where is the best place to keep their savings so they are easily accessed? Is it better to pay down HECS debt or put the money into the deposit?

ANSWERS: Rentvesting makes good sense. Jason Petersen suggests a property worth $300,000 while Jane Slack-Smith reckons it could go up to $550,000. Look into the First Home Super Saver Scheme, which allows you to salary sacrifice savings for your home. Don’t worry about your HECS debt.

With tighter lending for property investing, is the “rentvest” strategy still viable for couples such as Alecia and her husband Hamish? They have the perfect skills to be a dynamic renovation duo. Alecia studied design and ran an award-winning interior design business. Hamish has an architectural degree and two years ago qualified as an electrician. “We would love to buy something that we could renovate – even a derelict place as we are both quite resourceful,” says Alecia.

But Sydney property prices are so steep that they can’t really afford to buy there unless it is in an outer suburb or a one-bedroom or studio unit closer to the centre. Should they buy in a regional area such as

the NSW south coast, or in Hobart where they can rent out the property or use it as an Airbnb? “Or do we buy a block of land and build?” wonders Alecia.

Because they have run their own businesses and Hamish has been studying, they don’t have the financial profile that lenders prefer. So they have been renting. But Hamish’s new electrical business is taking off and his earnings should grow.

Is there a lender that understands this type of situation?

Alecia says they are saving hard, build-

ing an emergency buffer and paying down their credit cards.

Hamish has a big HECS debt of $65,000 while Alecia owes $13,000.

They have a deposit of $80,000 and wonder if it is enough to buy a $700,000 unit in a suburb like Campsie in south-western Sydney. Where is the best place to keep the deposit while they add to their savings?

Alecia says that they need a financial plan for the future, particularly to consider long-term goals. She salary sacrifices $70 a fortnight to super.