How to Buy Property on a Single Income
The property market has been a point of interest in Australia for some time, especially as of late. Property prices have risen higher than ever before, and the average level of income hasn’t risen in proportion. As a result, entering the property market is harder than it’s ever been.
Many overcome this hurdle by buying property in pairs. Husbands and wives, de facto partners and simple boyfriends and girlfriends buy property as a duo, sharing the weight of the mortgage and the work. But even then, it can be difficult.
So what hope does a single person have of buying property?
According to new data from RateCity, property ownership is nearly unattainable on an average solo income in most Australian cities.
Anything is possible. But the reality is that unless you’re particularly wealthy, you’re going to have a more challenging time entering the market than you would if you were to do so with a partner.
But don’t give up just yet. Here are some of the more common and effective strategies used by those on a single income to attain property ownership. You might find these tactics and strategies useful yourself:
Rentvesting is the strategy of renting out the home of your dreams whilst investing income elsewhere. For many, the income investment goes towards buying a more affordable property in another suburb.
The strategy is particularly advantageous because you get to live in your dream home whilst building a property portfolio at the same time.
If you’re on a single income, it can be a great way to enter the property market sooner, build wealth and maintain a flexible lifestyle. You won’t have to wait several years for a deposit, and you can still change your rental situation should your financial circumstances change.
Friends and family
Even if you’re single, you can still partner up with a trusted friend or family member to buy property together. The number of mortgage applications with more than one applicant attached has been increasing lately, with single-applicant mortgage applications on the decline.
For many singles, the “bank of mum and dad” is helpful for buying property. Whether it’s a simple donation or a joint property application, it’s not uncommon for singles to work with their parents to enter the market.
If you don’t have the option to provide a large enough deposit on your own, a Family Pledge Loan can help you buy a home anyway.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of buying a home, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.