Often we get asked 'Why should I buy?', and fair enough.. chances are you will buy something that will cost you as much per month for the mortgage repayment as it would to rent, but you'd be able to rent something a lot nicer for the same amount. So, here's our thoughts;
Problem #1 - 'I want what I can't afford, now!'
Often times in society today, we are given the opportunity to get anything without being in a place to actually own it, credit cards with limits that are 4 times our monthly income allowing us to buy that tv and think about how to pay for it later. We are in a position where we are told what looks successful, and that is what we need to be, or at least to appear... A large, modern apartment in a prosperous area of Sydney is one of those things.
How much is that apartment actually worth though? Sure your rent is affordable, but would you be ok with that rent going toward paying off your smaller apartment, in a more average location? Or, are you wanting to live a lifestyle that someone else can afford? I personally love the little luxuries of life, a nice kitchen, new floorboards and a Smart TV, but I want to think long term. Where am I at now? What can I afford? What will allow me to own my own property sooner?
Here are some pointers to help think about how to enter the property market..
- Know your income and expenses.
- what is the amount that will allow you to put money aside for that deposit?
- Know the market value of the place you're renting.
- Is this place in my budget? Would I be 'downsizing' if I were to buy a place today?
- Find areas you'd like to live
- How much is the average mortgage? The average mortgage repayment?
- Start renting in that area, and putting aside the difference into savings!
Next time we'll pick another problem and share some more thoughts.. hope this helps!