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Tips for first home buyers to get into the market
If you believed what you read in the media, you would think that first home buyers have absolutely no hope of ever owning their own home. This could not be further from the truth. In many ways first home buyers have better opportunity to purchase their first home than the generations before them. Interest rates are lower than ever. The first home owners grant (FHOG) offers a $10,000 kickstart to the first home, and the cost to build a good quality home is lower than ever.
Certainly if first home buyers are not prepared to make a few sacrifices, or to think a little outside the square, then getting into the property market may seem daunting. However these three simple tips will help to get first home buyers into the property market and building towards their ultimate family home:
1. Think of your first home as the first stepping stone on your path to achieving your property dreams.
Too often I speak to first home buyers who want it all; large home with all the bells and whistles. First home buyers should be looking at their first home as a stepping stone to bigger and better things, rather than going for their dream home first up. Their first home may be something they live in for a few years while they build more equity, their income increases and they find themselves in a better position to purchase a larger home. Their first home can then become an investment, or can be sold to fund a larger second home.
2. Buy where you can afford, then rent where you want to live
Many first home buyers complain that they cannot afford to buy their first home in the suburbs that they want to live. They do not want to move to a more affordable suburb for reasons of access to work, schools and friends. So they mistakenly believe that they are unable to get into the property market.
One way around this is to buy an investment property in an area that is affordable; for example a regional area. Then they can rent in the suburb that they wish to live. This way their investment property is paying for itself while building equity. The first home buyer continues to live the lifestyle they wish yet are gaining advantages from being in the property market and can build towards buying a home in their preferred area.
Purchasing an investment property as your first home will not negate your ability to access the first hime owners grant, provided you only use the first property a an investment and then claim FHOG on your first home.
3. Build instead of buying established
At the moment the Australian and State governments recognise the need for new housing stock to be added to the market to cater for a growing population. There are therefore advantages on offer for building a new home, most importantly the First Home Owners Grant (FHOG). In Victoria the FHOG is $10,000 for new homes only. This provides instant equity in your first home.
In addition to this, a brand new home can often be built well under the market value of the completed property. This also provides instant equity in the property, meaning you are well on your way to being able to purchase your second property or upscale toward your dream family home.
So while the doom and gloom stories of the hardships faced by first home buyers sells newspapers, it is far from reality. By speaking to an Advance Homes property professional, you will be able to learn more about the great opportunities available to first home buyers in today’s market.