Property prices in Melbourne and Sydney are absurd, but I am not buying into the idea that young people can no longer enter the property market without significant help. I help them do just that on a weekly basis. However, a lot of millennials cannot afford to buy a home in the area of town they actually want to live in. They are having to buy in areas way out of town to suit their budget.
This is often at the mercy of their lifestyle.
The good news is that youngsters have found a better way to achieve the Australian dream of home ownership. And it doesn’t require living in the sticks.
First home buyers are now more interested in buying an investment property first. Young investors are buying investment properties in areas that have great capital growth and are still really affordable. This way they are property owners, and they also live in a suburb they couldn’t otherwise afford, they’re close to work, cafes, restaurants, park lands, the city, Life’s good and the list goes on.
This takes care of two social pressures for millennials:
- Getting into the property market with all of your friends
- You don’t have to pay $100 to get home after a night out in the city
Whether you’re paying rent, or home loan interest, both expenses are dead money.
I work shopped the entire scenario and it all got a bit confusing so I decided not to go through the entire thing, but comparing and testing all aspects of this theory was really interesting. It certainly works whilst Interest rates are low. If this is something you are considering, then you’d be best to take your opportunity now whilst rental incomes are effectively covering all of your borrowing costs.
Don’t forget the objective – How will you end up owning your dream home, in your dream suburb, that you can’t afford?
The next step using this method is for the investor is to repeat the process once equity has accumulated in the first property. Then whilst the portfolio has expanded to two properties, and growing steadily, the investor is still living the life renting in their favourite suburb. Next step is much the same, repeat 2-3 years later, and repeat again 2-3 years later. Based on trends for the last 10 years, this theory does work.
After 10-12 years, you should have accumulated a sizeable deposit much faster than you could have ever saved. Then you can buy your dream home whilst not having sacrificed 10 years of your life living somewhere you didn’t want to live.
It’s a beautiful thing that you can create opportunities for yourself by thinking outside the square and going against history’s norm, working with younger generations has helped us craft solutions that are suited to them and their lifestyle. It excites us and we are keen to see what solutions we can come up with in the years to come.
If this method is something you would like to explore for yourself, click on the link below to watch our video about investing in property, and start your journey to Financial Freedom.
So click here to watch our short video on Property Investment.
https://mymortgagefreedom.com.au/investment-loan/purchase/established-property/
Or fill in the following form if you’d like to see whether this model will work for you.
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