Too late? Stacked Deck?

Hi all,

I am 40. Up until quite recently I was living week to week. This year though I have tripled my income ~210k.

I have no debts and a family of 4.

We rent in the south east ~2100 month.

I think my wage is quite good ...however for the life of me I can not see how to buy a property without either being born rich or already having a property to leverage against.

I come from an exceedingly poor family so have had to do everything in life the hardway. No savings until very recently but ATM are managing to put away 5k a month.

I have no debts Inc CC, loans etc.

I have to work in the city and we are some what tied to the area.

With awful properties selling for a 800k I would need to a mass a min of 130k for deposit ..that seems impossible in itself.

So am I mistaken in my feelings of helplessness? I am not after an investment, I want a home.

Any advice even if completely brutal is appreciated.

 

Save save save, buy once you have saved enough.

You could invest some of the savings in shares/crypto etc but prepared to lose what you put in worst case

Or you could save enough to buy an investment like the H&L deals @sash has been getting in Melbourne, and use some of the gains to fund the savings pool for the PPOR

 

Welcome Jol.

Why is it imperative that you BUY a home? Many on here rent in locations they desire to reside in, while investing in other areas / asset classes to attain wealth.
Try not to be overwhelmed by your situation and think outside the square.

 

Yeah that's the plan. ..Well it's all I can do really.

 

40 years old with no savings or investments = much harder to save a $100K deposit but you said you can save $5K pm now so you should be saving $60K pa - only have to do if for 2 years - you'll make it.

 

What @TAJ said. If you want to live in an area that is too expensive to buy into, rent there and look to invest your money elsewhere ... somewhere that is more in line with your affordability.

 

Sounds like you are in a fairly reasonable position and have a great base considering your current salary. If you are saving $5k per month its only going to take 18 months to 2 years to put away that sort of money as a deposit, and from there you will be in.

Obviously as your kids get older, the situation may change, eg partner goes back to work, school fees etc, so sounds like there will be plenty of opportunity.

Main question, how did you go from $70k to $210k, thats a huge jump!

 

Thanks for the warm welcome all. Honestly I hate cities ..so my 20 year plan is to be on the coast ..lock sport area ... Nice places there and cheap and away from the hussle and bussle

I guess there is a stigma of renting. People think you are a loser etc but the advice I seem to here from you guys is by where you can, rent where you want.

I guess the logical thing is to look for a property to retire too and lease is out to help with repayments?

 

$210K pa is a very solid income and 2-2.5 years to save for a deposit is really quite reasonable. Many people will be saving a lot longer than that to buy their first home. If you MUST buy somewhere, you could look at borrowing more and paying LMI, although this is not something I'd really ever recommend.

 

Nothing's guaranteed but chances are that it may be a good time to buy into Melbourne in 2 yrs (vis-a-vis now). So basically, save your arse off and dive in when the market takes a breather. It's not all bad.

 

Now you're talkin'!

 

You guys are absolutely lovely. Really appreciate the time.

As for the above. I work in IT (who doesn't) I did 10 years on the tools ...10 years ago I have a tax return saying my gross was 36k for the year.

10 years ago I decided I needed more so took a job (still at 36k) that gave me opportunities to get experience in Project Management. Worked every day for 5 years.. i went from. Admistrator to coordinator, the 5 years ago got a pay bump to 60 .. I worked another 5 years and went from PC to project manager then Senior Project manager. This was all tactical ..the company paid me poorly but gave me experience. On October of last year I decided I was experienced enough and I started reviewing offers. I picked a great place that pays me well. The reason I am on this money now is I suffered through low paying work for high end experience. If I'd taken the money early I'd be stuck in a 120k job ... So you could say I cashed in my chips. I think what I am on now is suitable for the rest of my life. The pity is that for my work I am needed in the CBD and can't do from a beach.

Edit:Over the decade the company paid for all my training and training. I hold a literal folio of diplomas and certs because of them.

 

Good on you for putting in the hard yards and getting to where you are today. I think too often these days, grads and people in their 20's expect to be earning $100k+ straight away. Ultimately you are better off from all that you have learnt along the way and what you have acheive to get there. Let's not forget also that you may have 20-25 years working life left. @ $200k thats pretty decent.

 

its really simple from here what you need to do if you want to buy an approx. 800k place (ppor I assume your not interested in investments). 1. save every cent you can to have the deposit. If you can, save 7-8k a month. I am sure there is room to increase that 5k/month savings. 2. Don't get any debt to give your serviceability max strength. When you have the deposit start looking. You may want to even look slightly further from your desired area to be able to get in quicker.

What makes it possible for this plan to work is your high income, hopefully not too many on the debt side. But you need to save like an obsessed hitman/woman on a mission.

Its really a realistic plan if you want it. But you need to be emotionally connected to the plan and give it your all.

 

Well done on achieving the Senior Project Manager role. Your salary would be envied by many.
Because of the nature of your employment (CBD based) the idea you proposed earlier of getting a deposit together for a home in a desired location for retirement and having tenants help pay it off has merit. Research is your friend. Keep saving steadily and remember to enjoy life along the way.
Suggestion : Put a photo on your fridge of a home you like in a coastal area you are fond of.
Positive reinforcement can often help with continued motivation.
Good luck with your journey.

Cheers
Taj.

 

Well done on all you have achieved so far, seems you have a great career and family.

The two years to save a deposit may seem like a long time, it will come up before you know it though. Just make sure you keep the focus on building your deposit (even if you have slower months, or watch prices go up and need to save a little longer), before you know it you'll have a deposit and OPTIONS. You don't need to know the entire plan (home now, or IP or buy future home down the coast), focus on getting that deposit and having the options in time. You have a couple of years to work out exactly what you want to do.

 

Thanks all.

Writing is very much on the wall. I am not a game player or a risk taker. Not interested in getting rich off property a single home to see out my days.

 

You should be eligible for first home buyers grant.
I would recommend grab hold of that, combined with the stamp duty waiver, buy something in the northern crappy suburbs for 450k on a 90-95% lend , then use the equity from that combined with your savings to buy something a bit more desirable. I think suburbs surrounding Broadmeadows still have steam left in them if you can buy in around 450-470k
Otherwise as other said buy a house and land package in the outer suburbs. Then when the time comes sell down and buy the retirement house in Loch sport.
Renting is smart, losers max out on a “home” instead of putting their money somewhere where it can work harder. Why miss out on home ownership becuase you can’t afford to buy in the city when you can live there a whole lot cheaper than the suckers who are paying 3x your rent to live there with a mortgage.

 

Do you really need to spend $800K on your first home? Need, not want?

If you work in the city, check out the rail lines and work out commute time to give you somewhere cheaper to start out. Choose something that suits you, but also make sure anything you buy is also attractive to possible future tenants.

Then, as said, save as much as you can.
Marg

 

no debts, $210k, (assuming no gambling, drugs, personal, financial money pits)
there is no way you arent going to save

good luck