Think You Can’t Afford it? No deposit? No partner? Purchasing a property IS possible!
A few months ago I met with a couple in their mid-40s who were shocked to learn that it was possible for them to buy a property. For years they were convinced that they were completely priced out of Melbourne’s ‘expensive’ market. Thankfully a savvy accountant friend showed them it was in fact possible and suggested they have a chat to me about their finance.
Crunching the Numbers
The couple both earn average incomes of $50,000-$70,000p.a, and at the time were paying fairly steep rent. They had saved $50,000, which was more than enough to purchase a $500,000 apartment in the highly desirable seaside suburb of Port Melbourne. What they couldn’t believe was that the mortgage repayments were LESS than what they were currently paying in rent!
Even if you aren’t in the same boat as this couple – you might not have the $50K deposit, or someone to buy a property with – you CAN still buy something. Let me show you how:
Let’s assume you earn $60,000 per year and have no dependants. You have a car loan of $400 per month but that’s it as far as financial commitments go. Based on this, you can buy a property around the $350,000 mark.
The Benefits of Being a First Home Buyer
As a first home buyer you are entitled to two benefits – a 40% reduction off the stamp duty, PLUS a $10,000 grant if you buy a brand new property that hasn’t been lived in.
So by buying something new you essentially won’t be paying any stamp duty – which constitutes a whopping saving of $14,000! So with the stamp duty covered, all you have to do is stump up the 5% deposit which is $17,500 for a $350,000 house.
For a lot of people this is the tricky part. It sounds like a lot of money to save.
The good news is you can absolutely do it, and you can even do it in 12 months.
A Deposit in a Year: Short Term Shoestring for Long Term Security
To achieve your goal you’ll need to tighten the purse strings and sacrifice a few of life’s little luxuries. Your budget will become your new best friend.
The end result? If you hang onto this property for 15 years and pay it off in that time, you could have a $600,000+ property with absolutely no mortgage!
Isn’t that worth one short year of pinching your pennies?
If you would like more information on my calculations or how you can start working towards your goal of owning your own property contact me on 0421 208 640 or email firstname.lastname@example.org.
(disclaimer: normal lending criteria still applies)