Get started up the prop­erty lad­der

In­creas­ing prices raise hur­dles for young peo­ple try­ing to buy their first prop­erty. But hard work, smart tac­tics and a firm goal can lead to life­long se­cu­rity through prop­erty.

Mt Druitt - St Mary's Standard (East) - - REALESTATE -

WITH prop­erty prices pre­dicted to rise by up to 10 per cent or more in some parts of Aus­tralia this year, it is go­ing to be­come even more dif­fi­cult for young peo­ple to get started on the prop­erty lad­der.

So how can young peo­ple get a foot on the first rung? Fo­cus on the pos­i­tives Prop­erty is get­ting more ex­pen­sive, but what bet­ter rea­son can a young per­son have to ini­ti­ate a plan? Once they have bought, they are likely to make a rea­son­able profit soon af­ter. Keep an eye on the prize Set your­self a goal while try­ing to pic­ture the dream of what life would be like once you have bought a prop­erty. Un­less you re­ally com­mit to that goal, and with­out a big dream in place, it’s likely that you’ll give up at the first hur­dle. Pain to power If you get into the mar­ket at the age of 20, by the time you’re 30 a $500,000 prop­erty could have risen to $750,000 or $1 mil­lion.

Af­ter a few years of own­er­ship, you might be able to with­draw some of the eq­uity to buy prop­erty num­ber two and even num­ber three be­fore the 10 years is up.

CHRIS GRAY Start sav­ing The sooner you get into the rou­tine of tak­ing money from your wages be­fore you spend it, the bet­ter.

Prop­erty prices rise quicker than you can save, so you need to com­mit as much as you can to the plan.

You will need at least a 5 per cent de­posit and 5 per cent of the prop­erty’s cost for stamp duty and le­gal fees, there­fore aim for $30,000 to $60,000 for a prop­erty cost­ing $300,000 to $600,000.

If you’re sav­ing $1000 a month, you need a plan B be­cause by the time you save a de­posit, the prop­erty could cost $50,000 more. Work for it Get a sec­ond job or even a third, fourth or fifth job. It might sound ab­surd, but it is what peo­ple have en­dured to get into the mar­ket in the past and are now reap­ing the re­wards of their ac­tion.

If all of those ex­tra wages go to­wards sav­ing a de­posit, within 12 months you could be there.

Think back to your goal and dream. Is it worth a year of pain to set you up for the fu­ture? Con­sider a joint ven­ture If you are on a low salary and al­ready work­ing hec­tic hours, you might need a joint ven­ture where you team up with your par­ents, a sib­ling, a col­league or even a stranger to buy to­gether.

If you have no de­posit or abil­ity to ser­vice a mort­gage, but you have the time to learn the fun­da­men­tals, read books, search for a prop­erty, do the ne­go­ti­a­tions and over­see the prop­erty man­age­ment, those is­sues could be your ad­van­tage over a high-in­come earner.

Have a so­lic­i­tor draw up a le­gal agree­ment to high­light what hap­pens to the prop­erty and who pays what if you fall out. Plan ahead Use the time it takes to save a de­posit to re­search.

There are books, mag­a­zines, sem­i­nars and TV pro­grams to help build your knowl­edge, and then it’s time to hit the streets.

It takes at least 50 to 100 prop­erty in­spec­tions to fa­mil­iarise your­self with an area. Re­ward your­self Re­ward your­self while you are sav­ing and work­ing hard or you risk be­com­ing dis­con­certed. — Chris Gray is host of

on Sky News Busi­ness chan­nel and chief ex­ec­u­tive of buy­ers’

agency Em­pire

First-home buy­ers face mak­ing sac­ri­fices to get ahead in real es­tate.

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