The youth of Australia’s working population is gaining inertia in breaking into the Australian property investment arena and kickstarting a new trend that’s fast emerging:
Treat your first home as an investment property, not a main residence.
It’s all about buying with your head, and not with your heart. We often associate buying our first homes with sentimental thoughts, and we have all fantasised about what it would be like, from that two storey slide directly from our bedrooms to every room in the house, to replicating Gaudi’s gothic architecture into the exterior of our exquisitely designed future houses.
But being successful in property development means leaving your fairytales at the door and thinking with your calculator. With the RBA cutting interest rates, variable rates on mortgages have been dipping consistently since 2011 and providing a promising opportunity for prospective home owners whose borrowing situations can seemingly only get better and better in the oncoming financial year.
Lenders are also particularly attracted to borrowers who not only have regular incomes from steady jobs, but also have a great capacity to save. This particularly captures young members of the workforce who have low rent and costs of living or live with their folks on little or no charge at all, and whose bank accounts are accumulating – but gathering dust.
This is where the genesis of the trend originates: the unfulfilled potential of all their savings that fans the flame of interest in investment.
Conventionally, it was a struggle to secure that first home – not just because it breaks the bank but also because of making major compromises along the way, whether that be living 101 kilometres from the city or squeezing 3 into an apartment for 1.
But the key benefit of this ‘investment-first’ strategy is that first home buyers are able to sidestep these compromises, get their foot in the door of the property world and even establish a channel of regular income from early on in their careers. On top of this, for those who earn just over $80,000 a year (the ATO reported that most Australians earn between $80,000 – $120,000 on average), our middle class will even benefit from the negative gearing that results from their ‘rentvestments’, which acts to erode their taxable income to push them below the $80,001 – $180,000 bracket that could save them hundreds in tax.
In addition, with technology that allows us to keep tabs on diverse categories of properties at the tip of our fingers, taking your first step into the realm of real estate has never been easier. What’s better: our lawyers will guide you through the whole process and ease the blow of inevitable legal paperwork that burdens all investment. Check out our packages now or schedule a call with us to explore your options and embark on your journey in property development today!
Out with the fixed deposits that earned us peanuts in interest; in with the shifting tides of enriching investment.