Can’t Afford Your First Home? Here’s Why You Should Consider Rentvesting
Jokes about smashed avocado on toast aside, saving the 20% deposit to purchase a first home may seem insurmountable to young people living in Australia’s major cities.
Even if you scrimp and save for years, house prices could rise faster than your savings balance, and even when you finally have the deposit will you be able to meet the repayments?
There is a better way. It’s called rentvesting, ie you rent where you want to live and buy an investment property in a more affordable location.
Most financial institutions require a lower deposit for investment loans than for home loans, sometimes as low as 5%, and most investment loans have an interest only period (usually for three years) which means the rent should comfortably cover your repayments for at least this period before the loan reverts to principal and interest payments.
Getting your foot in the door
The key factors to making rentvesting a success so you can buy your own home as soon as possible is to get into the market. Once you own one property, it’s easier to buy your next property. But you do need to make sure you buy well. It’s all about getting your foot in the door, and buying a property that will grow in value faster than you could save that deposit for your own home.
This is where you need to call on The A Team for the best possible advice. Your property mentor will look at suitable areas for you to purchase that all-important first investment property. He or she will look for areas with infrastructure investment underway or in the planning stage, such as new roads, hospitals, schools and airports. Investment leads to job creation, which in turn creates housing demand which can lead to capital growth through rising house prices.
Once the general location has been pinpointed, your property mentor will look for other factors. Is there a suburb undergoing gentrification, with professionals moving in and doing up older homes? Where are the locations near great facilities including shopping centres, parks, schools and a hospital or university? Where are rental vacancy rates lowest, and rental returns highest?
With all this essential research to hand, your property mentor will be able to advise you on the best investment property to buy within your budget. Once you have sufficient equity in this first property, you can add another to your portfolio, and so on until you are in a position to buy a home of your own in the place you want to live.
Avoiding the pitfalls
Investing in property on your own is full of pitfalls for the unwary and is a complex and time-consuming process. Working closely with a property mentor ensures you can be confident at every step of the way that you are making the right decisions – from securing the best loan for your needs, to finding the right property, negotiating on price and choosing a property manager to find tenants and care for your property.
With The A Team behind you, your first investment property will set you up for a strong financial future and a sure-fire path towards your dream home.
So don’t wait until you have the deposit for your dream home. Don’t wait for the market conditions to be ideal. Work on making it happen as soon as possible. Do everything you can to make yourself look good to lenders by paying down credit cards and personal loans and building up your savings. Then contact The A Team to ensure that your first investment property is a solid start on your path to home ownership,without sacrificing your lifestyle — including smashed avocado on toast with a great coffee at your favourite cafe!
Make Smart Investments and Partner with A Team Property Group
The A Team Property Group is the premier choice in Australia for consulting on property investment. You can rest easy and watch your profits climb without worrying about taking on the risk of plunging into the market yourself. Get the help you need to succeed and seek out the property investment experts at the A Team.
Are you ready to start investing in Australia? Consult with the dedicated team at A Team to ensure you’re making smart investments. Get on the phone with The A Team Property Group and start succeeding today!