Do you want to be on your own property ladder?
You’ve been renting for years. It feels like forever. You can’t imagine how you could ever take the step from tenant to homeowner.
And it’s understandable. You’re renting an apartment and the Aussie dream is to own a house on a quarter acre block.
The traditional, clichéd way to look at home ownership is to save, save, save, frittering away every penny and stashing every dollar you have in the bank. It used to make good sense, when interest rates were healthy and could get $1000 a year in interest for every $10,000 you had in savings, but those days are long gone and don’t look like coming back anytime soon…or even in this lifetime. So today, rather than good sense, putting your money in savings only makes good cents.
The cost of houses is through the roof and you’re getting no saving help from the bank, so why not just throw in the towel and eat that $22 smashed avocado on toast?
Well, it may be time to look at things a little differently.
Who said the first property you bought had to be the dream home that you’d live in forever? In fact, who said it even had to be a home you’d live in at all?
If you want to get to where you want to be, you’re going to need enough capital and equity to eventually buy a great owner-occupier. But those old methods of getting there are no longer so easily available. You can’t necessarily just buy an apartment in the suburb where you want to live, then upgrade into a townhouse or small freestanding home and then upgrade again.
Markets are too hot, they grow too quickly… well at least the markets where you want to live do.
But some markets are only just beginning to grow. Some markets have properties that are much more affordable and have plenty of upside for growth in the near future.
So why not invest in a market where you can create growth and income and then do it again… and again… and again? Until you get to the place where you need to be.
If you’re reading this, chances are you’ve heard of Binvested and Blink Property founder Nathan Birch.
Sure, he’s got 200 properties and a giant house on a parcel of land now, but it took him a long time to get there. That’s because when he was starting out he knew he was in no position to get the big house he wanted right away, but that there was a certain number he had to hit to eventually be able to do so.
He famously lived with his mum for the initial years of his investing career. For about 10 of those years in fact.
By buying affordable properties, adding equity and buying again, then doing it again, and again, he was able to create the wealth he needed to buy his ideal house.
When you target the affordable end of the market as a property investor, you’re no wolf of Wall Street. There’s no getting rich quick on a high risk, speculative play. Instead it takes multiple purchases to gather enough small increments of equity to make a difference.
And it makes sense. If you are going to invest $1 million, you are going to double your money much quicker buying five properties at $200,000 each, than if you were to buy a single $1 million property. It takes a lot more for an expensive property to double in value than it does for a $200,000 property to hit $400,000.
The best thing about all this is that you can do it from your rental without changing the way you live. Find an affordable property to invest in and bang, you’re on the property ladder. Pull out some equity, use it for your next deposit and you’ve got both feet on the ladder. Do it again and you’ve climbed another rung. Do it differently, but do it effectively and you can get onto your own property ladder.