I wrote a piece last year directly related to the comment, ‘I’m never going to own a property, it’s unaffordable’.
In a nutshell my response was real estate is not unaffordable.
Maybe the area you want to buy in is, but there is great value out there and perhaps the journey to the place you want to live starts with an investment in a place you don’t.
I am reminded about the article regularly.
Whether it be stories in the press about unaffordability, comments online or conversations with friends and family.
During a chat about this recently, I was confronted by a friend.
She is in her mid-40s, divorced and living in the outer suburbs of Sydney.
She is no longer eligible for any first home buyer concessions and was fiercely arguing her point that the market was unaffordable for first home buyers or those people in her situation who couldn’t save at the same rate the market was growing.
A very tough situation and adding to that is the reality that she doesn’t want to leave the area she has now lived in for many years.
The facts are the facts, markets move. Sometimes up and sometimes down.
Most people who live in the best or most expensive areas bought their first home somewhere else.
That or some change has occurred and the market has crept out to them so what was once an undesirable area is now a hipster’s paradise.
To catch the market, you have to get into the market.
The term ‘rentvestor’ describes people who are looking to get into the market but are not prepared to leave their community.
What they do is buy an investment property in an area where they can afford and rent in the area they want to live in.
Over time their investment increases in value and they either purchase another investment with the equity or sell and purchase in their area of choice.
Getting angry at the market is like yelling at the surf because the swell is too big.
I have watched markets move up and down with extraordinary speed over the last decade.
In many markets around the country, the experts are saying it’s overheated while in other regional markets there is some extraordinary value.
My advice to my friend was to establish her comfortable borrowing capacity and then spend some time online searching for the markets where she could buy properties in that price range. There will be more than you think.
Once identified, it is time to become a student of that market.
Subscribe to real estate website portals, get on local agent newsletters and make time to attend inspections and auctions.
Real estate, like any investment, has an element of risk.
She’s going to investigate some regional, coastal and even the Brisbane market.
The decision to buy must be informed and independent but once you’re in, you are in.
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