Desperately trying to get your foot in the door of the competitive property market? Real estate expert Zaki Ameer, from Dream Design Property, shares his 7 expert tips to help you buy an investment property on a modest salary.
Unfortunately for Gen Ys, Australia boasts one of the most expensive housing markets in the world. Between 2001 and 2011, the median house price in Australia more than doubled from $169,000 to $417,500, while median annual incomes only increased by half — from $36,000 to $57,000. There’s no wonder the general sentiment toward property investment among Gen Ys is one of fear and surrender.
Follow these 7 expert tips and get a foot ahead in the investment property market.
1. Go soul-searching
Why you’re investing in property is equal to, if not more important than how you do it. To win the property game you need to find the deep, underlying reason why you’re doing this in the first place. Without them you may only see short-term success and eventually run out of motivation.
2. Find the right mentor
Sir Richard Branson once said that the missing link between a promising business person and a successful one is mentoring, and I couldn’t agree more. Choosing a mentor is one of the most important decisions you can make as a professional. If you’re not sure where to start, try reaching out to successful industry players through LinkedIn.
3. Be ruthlessly persistent
Having big dreams, no matter how much you want them, isn’t enough. You need to commit yourself to ongoing resilience, patience and focus before you even start, and never waiver. It took 15 years of exactly this to get to where I am today.
4. Live with your folks
If possible, I strongly advise staying in the family home to save cash; and don’t feel embarrassed about it. In fact, nearly 23 per cent of Australian families have adult children living at home. It’s a totally acceptable trend occurring among Gen Ys trying to avoid the rising costs of rent, utilities and groceries.
5. Eliminate debt
The amount of credit card and unsecured debt (personal loans) you have can severely affect your borrowing options, and eliminating this will open up options from the bank. As long as you don’t have the cash to buy a property yourself, you will need the help of the bank.
6. Think twice before partnering up
While investing with a partner might help you crack into the market, as the years pass your individual goals can take different directions and this makes joint investments risky business. Make sure you have a solid contingency plan should things go sour.
7. Use the 50/30/20 rule
To determine how much you should be saving each month, divide your monthly pay cheque into three categories of expenses: 50 per cent should be allocated for the essentials, 30 per cent should be put towards your little luxuries and the remaining 20 per cent would go towards your savings.