It’s widely reported how difficult it is for young people to get on the property ladder. But that’s not strictly true and here are some tips that will help if this is something you are considering.
Set a goal, create a budget and track your progress
Work out how much you will need as a deposit to purchase a house you can afford. It will not be your ideal home! You might decide to buy somewhere affordable and rent it out while yourself renting somewhere that’s more convenient or desirable for you.
Create a budget and adjust your outgoings to ensure you can save the amount you need. Keep an eye on your progress by regularly checking that you are on track.
Avoid lifestyle inflation
There’s a tendency to spend more when you earn more. But if you save or invest that additional income (or at least part of it), you will reach your property investment goals faster.
Instead of relying on credit cards or hire purchase for big ticket items like cars and appliances, save the money first and pay cash. You will save considerable amounts on each purchase by doing this.
Think about buying second hand instead of brand new. TradeMe is an excellent source of high quality, barely used everyday items like dishwashers, dryers, microwaves etc.
Make good use of Kiwisaver
Kiwisaver is a no brainer as the government and your employer pay into it alongside you. Even if you are self-employed, invest the bare minimum ($1042.86) and the government will add $521.43 a year which at just 2% a year for 20 years amounts to $774,000.
When you buy your first home, the faster you pay off the mortgage, the more equity you will have in it and the faster you will be able to use that to invest in a rental property.
If you are interested in getting on the property ladder but either don’t know how or don’t know if you can afford it, talk to us. We can guide you through the process so you don’t make mistakes that could end up costing you your entire savings.