Finance Property Why you can afford to buy a property this year

Why you can afford to buy a property this year

Tweet Share Reddit Pin Email Comment

When it comes to property prices in Australia or at least in Melbourne, where I live, I just lose my marbles.

I used to think it was suburbs close to the city where prices had gone ga-ga. But in the past few years, things seem to have got really out of hand – even suburbs way outside the native habitat of your average hipster.

However, rent’s pretty extortionate too. Sure you’re not paying your own mortgage – but you are paying someone else’s, which is nice of you. And even if you don’t have to pay for repairs and so on, you’ve still got to stump up your rent every week.

Is now the right time to buy your first property?
The best places to invest in property in 2015

How I bought my first place

You might find you need to start small. Photo: Shutterstock

I can’t complain too much. I bought my first place 10 years ago. At the time, I was a young journo on a local paper, and my wage was certainly nothing to write home about. Earning $50,000 a year was still just a dream.

It was a two-bedroom unit about 40 minutes south of Melbourne, an odd choice for me in hindsight as I like to be among the action. However, it was minutes away from a beautiful beach, the unit was lovely and it was a great price (although I just managed to pay the mortgage each week). There was no way I could have afforded something like that nearer to the city at the time.

I lived there twice for brief interludes before realising that I wanted to be closer to friends and work.

However, I certainly don’t regret buying that place, which has allowed me to flit around the world and rent in various awesome inner-city places while still having something solid to my name that’s continuing – fingers crossed! – to increase in value.

The tenant now pays my entire mortgage, plus a little bit more, and except for a few trips down there to fix things and spruce up the garden, it doesn’t cause me too much drama. A few years back I used the equity to buy a second one-bedroom investment property closer to the city.

I write this not to brag (I still owe the bank a fair old chunk), but to prove there are different ways to enter the property market, even if you think you can’t afford it.

So if you’ve decided the time is right to buy your first place, or invest in a second or third, let’s look at a few different options that could help make it happen:

Buy something further out

If you want to live closer to the city but the prices are making your mind boggle, start researching suburbs, or even regional areas that you can afford. If you can find a cash-flow positive property in an area with a growing population and solid employment, a tenant could be paying off your entire mortgage from day one. You can always sell it later to buy something of your own to live in, or keep it long-term to build a future nest egg.


I think housesitting one of the best ways to save money in a hurry going around. If you’re struggling to scrape a deposit together, sign up to a housesitting website such as Aussie Housesitters or Mind A Home, and live rent and bill-free while you continue to squirrel the dollars away. If you’re part of a couple, the savings will mount up even quicker. It might also allow you to try out potential areas that you’re interested in before committing the big bucks.

If you have a young family, why not try and find a long-term housesit, so you can still save but don’t have to move as often?

Buy a place you like, but keep living in share house for now

Perhaps you’ve got your eye on something in a particular area, and think you could just get it over the line with your deposit. However you might struggle to make the mortgage repayments.

One option is to take the plunge and buy it, while continuing to live in a sharehouse for a year or two while you rent it out. You could also set your loan to interest only for the first year, or few years while you work on saving more money or getting a higher wage.

Get a housemate or two. Photo: Shutterstock

Geta a housemate or two

OK, you might want your own space, but for the first year or two the extra money might come in super handy. I lived in my first place for a few months by myself initially, before realising that a housemate would make it a lot easier. You could find a housemate for the first year, advertise your room for shorter times every so often on Gumtree or Airbnb, or find an international student looking for digs.

Buy with friends or family

If you have a good friend in the same situation, why not think about buying a place together – either as an investment property or to live in? Don’t forget to get a solid legal contract drawn up. After all, partners come and go, jobs and plans change, and you might hate living together. Alternatively, you might love it and be able to buy something bigger than you could afford solo.

Approaching a family member to co-invest, or lend you some money for a limited time, is another way to get your foot on the property ladder.

This story was first published on Hey, Little Spender!

View Comments