Owning your own home is often considered the great Australian dream, yet for many potential homeowners, that’s exactly what it remains: a dream.
If you’re struggling to figure out how you’ll ever manage to get on the property ladder it could be worthwhile doing some research to see what other options could be suited to you. As with any property buying strategy, you’ll need to consider the pros and cons, and seek out expert advice.
While there are several ways first home buyers could get into the property market, we take a look at 4 slightly less traditional options.
- Can’t afford the area you want? Rent where you want to live.
Rentvesting may just be an option for you. Typically, a rentvestor is a home buyer that chooses to rent in the area they want to live, but can’t afford to buy, and buys an investment property in a more affordable area.
- Shared ownership
Ever considered buying property with good friends or even family? This option may be better suited for those looking to invest rather than live in the house themselves. But, despite buying in a group being advantageous, it doesn’t come without potential pitfalls. If you are looking to go into co-ownership it is important that you get plenty of legal advice if you are going down this path.
- Start off with a starter home
It’s tempting to want to buy your forever home straight off the bat. But would you buy a starter home now or rather save up until you can afford your ‘forever’ home? A starter home is something you’d be happy living in for a few years even if you know you’ll outgrow it. It could be a fixer upper (however, do keep in mind improvement costs), an apartment or even a smaller more affordable house in a neighbouring suburb. Either way, a starter home could help you get into the market.
- Consider asking a parent to go guarantor
If you’re looking to buy your first home but need help getting there, enlisting the help of a guarantor may be just the ticket. Your guarantor, which is usually an immediate family member, allows the equity in his or her own property to be used as additional security for your loan. The primary security for the loan will be your property, but the lender will also take a mortgage over your guarantor’s property. This mortgage will not support the loan directly but will be used to support a guarantee from your guarantor.
However, if you default on your home loan, the guarantor becomes responsible for paying your debt.
