How to get your foot in door

The Weekend Post - Real Estate - - Real Estate -

$500,000 prop­erty could have risen to $750,000 or even $1 mil­lion-plus.

It’s go­ing to take some sac­ri­fice if you’re go­ing to buy a prop­erty, as it’s go­ing to need a rea­son­able de­posit.

Even with ten­ants in that in­vest­ment prop­erty, there will be a dif­fer­ence be­tween the rent and the mort­gage that will need top­ping up from your salary. Start sav­ing:

The sooner you get in the rou­tine of tak­ing money from your wages, the bet­ter.

Prop­erty rises quicker than you can save and con­se­quently you need to com­mit as much as you can into the plan.

You’ve also got to be re­al­is­tic. You’re go­ing to need at least a 5 per cent de­posit and 5 per cent for stamp du­ties and le­gal­i­ties – there­fore you’ll likely need $30,000-$60,000 for a $300,00-$600,000 prop­erty. 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 and are now reap­ing the re­wards.

It doesn’t have to be for­ever but if all of those ex­tra wages can go to­wards sav­ing that ini­tial de­posit, within 12 months you could be there. Joint ven­tures: the pros and cons:

If you’re on a low salary and al­ready work­ing hec­tic hours, you might need to look into a joint ven­ture.

This is where you team up with your par­ents, a sib­ling, a col­league or even a stranger to buy a prop­erty to­gether.

The best joint ven­tures are when ev­ery­one wins and when ev­ery­one plays their own part.

It is much bet­ter to own 50 per cent of a prop­erty than 100 per cent of none at all.

So, if you’ve got no de­posit or abil­ity to ser­vice a mort­gage, but you have the time to learn the fun­da­men­tals, read lots of books, search for a prop­erty, do the ne­go­ti­a­tions and over­see the on­go­ing prop­erty man­age­ment, then that could be your ad­van­tage over a time­poor, high in­come earner.

Al­ways get a so­lic­i­tor to draw up a le­gal agree­ment and high­light what hap­pens to the prop­erty and who pays what if you both fall out. Take your time and plan ahead:

Do as much re­search as you can. You want to en­sure your first pur­chase is as suc­cess­ful as pos­si­ble. If you end up buy­ing a le­mon, you might have to start the process over again.

It takes from 50 to 100 prop­erty in­spec­tions to fa­mil­iarise your­self with an area and know which are the good ones. Then you will need to track the fi­nal sales prices to get an un­der­stand­ing of what you’ll get. Make time to re­ward your­self:

It’s im­por­tant to re­ward your­self along the way when you’re sav­ing and/or work­ing so hard, as oth­er­wise, you may risk be­com­ing dis­heart­ened or just jaded.

Set mile­stones and re­ward your­self with the oc­ca­sional night out with friends, an overnight trip away or other such en­joy­able ac­tiv­i­ties.

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