Potential First Home Buyer, Should I Buy?

Would love to hear your thoughts on this, any reason why I shouldn't buy? Is the calculation not making sense? Is it due to saving more money now means better purchase in the future? Cheers

 

You totally got me with this! Maybe I'm an odd one, but yeah, I just feel like I'm my own independent person doing my own thing. Even if I find someone, I'd hope to find someone who is also their own independent person doing their thing.

 

Thanks mate, I should probably expand on this a bit as I was talking more from a future point of view, I only got promoted ($97K) yesterday! haha. I've actually only been working for about 2 years and started at $59K, but have been super lucky to be promoted a few times recently.

So my saving is low as I had less money and a friend told me that for my first job out of uni I should take the first 2 years to have fun haha. But now that's up and I have to start getting more serious about my future. I very much agree its time to tighten the belt a bit, and save as much as I can. Thanks mate!

 

Non financially speaking I cant imagine being young and living that far out and commuting that far for work much less committing myself to that situation for the foreseable future.

Financially, yes it sounds like you would be stretched at least from barley having a deposit. You could pay half the rent you do now if you lived with another person in a much better place and save the balance to put towards a proper deposit.

Take all your planned strata fees etc and break into a weekly amount, house sharing will be hard to go wrong

 

I am not a seasoned investor. But I see that you are in the same situation where I was in 4years back but you are in a little bit better situation (Serviciablity wise). I live in around Parramatta region.

Saving 50% for a property in Sydney is nearly impossible (my experience) with annual wage with considering property price change and inflation unless you have some other form on investment gain such as stocks etc.

First, there will be always doomsayers irrespective of market direction. Move away from those people. Only you know your situation accurately. Read and educate yourself. No need to go to seminars or pay monies. Propertychat is a good place. You can get good books well under 20$ in Kindle. These help you to get many options to work with based on your situation.

But the key here is to make sure to set your priorities (assuming you are after apartments).

• Will you accept delayed gratifications? Example, buy a property with a land portion somewhere else. Keep renting. You can earn tax benefits on this. So you can save again to buy another property. but there a few things to watch as well. Such as cash flow / age of the property etc.
• Are you going to buy off the plan/brand new/established? I would not suggest getting off the plan properties at this point.
• How long you are going to hold it? Longer the holding time, lesser the risk. The property will appreciate at price over a long time.
• Where do you want to be in next 5/10years?
• Think about location. Transport, Schools, Malls. Properties close to these are safe bets as it holds value rather than others. I have seen properties on two adjacent streets have different value due to a school catchment.
• Talk to more than one mortgage broker. You will see the serviceability difference between them. It costs nothing for you to do an initial check.
• As discussed above, check for any grants.

 

Trawling (not trolling!) these forums is a very good start - plenty of professionals and seasoned investors willing to answer questions and provide free advice. Just remember, it's not personal in nature and you should always, always makes sure any advice you act on is specific to your needs and situation (didn't that sound like a disclaimer?!).

Yes, definitely buffering the interest rate is a good idea and I wish more people did it. The reality is that at this stage we're likely not going to see any or significant rises for quite a while so once you execute you can focus on paying down debt to reduce that risk if that is your concern.

- Andrew

 

Thanks so much for this, I definitely think I'll learn a lot from here, I have a goal to buy in 6 to 9 months time right now, so plenty of time to learn a lot.

Great to hear I'm going the right way with buffing the interest rate. I agree it will be interesting to see where its going to go, but I also don't see it rising badly, but my play is exactly that haha, pay it off as quick as possible reducing risk, but also will be great to say I own something, and who knows how I go from there.

 

This is my issue as well, so many people say to ensure I have such a high deposit but at the rate housing typically goes I just don't see how I can catch up to it unfortunately. Which makes me think its impossible without outside investment.

This is absoutely great, and some really good questions here that really helps me think it through. So thanks so much for posting it.

The first point to own land but keep renting is super interesting, its not something I even heard of. I'll definitely explore the option.

To be honest I was hoping to buy a second hand place, hold it for maybe 5 to 10 years, depending how I go I may stay there and use it to start paying for a new place to rent out.

Location is definitely a big one, in particular train and coles/woolies are big for me. Agreed on what you have, I recently read that being on a main road is a big no as well, really eye opening as I do hope to sell the place again some day. For an overall retirement place to relax in (likely smaller place) but thats super future.

Great idea to talk to multiple mortage brokers, I've talked to one so far, but will definitely try a few, even just to get their thoughts.

Thanks again mate!

 

I rent in the CBD for the past 2 years, so I kind of feel I've been passed a big stage of living it up. Is commuting quite bad? An hour to work seems alright for me but, I haven't actually tried it yet. Would definitely love to live closer, but housing of that price is nearer to $600K or higher, and I just feel priced out with that. maybe in the future?

Cheers for this part, I will definitely keep it in mind.

 

In sydney or melbourne, an hours commute is just the suburbs.

for those who live in the smaller cities or regionals....

 

Yes, that's a good idea. But the catch is that you may not get eligible for government grants. Please do some research on the eligibility if you go that way. Interest rates are a bit higher as well.