Buying a house is one of the biggest decisions of your life. If you decide to buy a house when you’re single, you may feel overwhelmed by the growing mountain of costs, especially if you’ve previously lived with someone and shared expenses.
Often when we think of the cost of buying a house, we may not consider ALL of the costs involved. If you don’t take into account things like stamp duty, rates, insurance, furniture, landscaping and fencing, they may come as a big reality check later on.
While this may seem like a difficult feat, it’s not impossible, with the Australian Bureau of Statistics reporting that 24 per cent of Australians (that’s nearly one in four!) live in single-person households. As more and more singles are opting to buy solo, we’ve compiled some tips on how to enter the property market.
Research, research, research!
Before you even think about searching for a home, you need to thoroughly research everything from the current property market to your budget and financial circumstances.
You also need to seek advice from a broker regarding your financial circumstances and borrowing capacity. A good broker will help you make the most informed decision and help you make a realistic property decision.
Accept that you may have to make some compromises
What your dream home looks like, and what you can afford, is likely to differ. If you have your heart set on a house close to the city, you may have to compromise for an apartment near the city, or a house a bit further out.
Remember, buying your first home is a way to break into the property market and is simply a stepping stone towards your forever home.
Just because you buy a property, it doesn’t mean you have to live in it. If you can’t afford to live in a place of your own but are content to live at home (with your parents) or rent, buying an investment property may be a more affordable option.
Investing, or ‘rentvesting’ gives you the option to purchase a house in a suburb you love while renting in a suburb you can afford. This allows you to have someone else ‘paying’ your mortgage while you rent elsewhere, giving you a foot in the home-owning door.
Review your finances
Seeking an alternative source of income may be required if you aren’t earning enough to cover the expenses of owning a home.
Getting a second job is the most obvious choice, but if you are working full time, this may not be a sustainable option. You could also speak to your employer about getting a pay rise or reducing your discretionary spending.
Ask for help or consider joining forces
Another thing to consider is partnering up with your parents or even a friend. Your Mortgage found there was an increase from 5 per cent to 20 per cent of parents guaranteeing their children’s home over the last five years. They may also be willing to help out by giving you a lump sum towards your deposit.
Buying a house with a friend or family member can increase your borrowing power and also allows you to share monthly expenses. Banks can split a loan, meaning each buyer can effectively have a loan account to make payments to.
To find out more about how you can take steps towards buying your own home, book a free meeting with us.