For those of you who are in your second or subsequent home, you will no doubt have memories (fond or otherwise) of your very first home of your own.
No matter how humble, that first home got you on the property ladder. It was an important stepping-stone to where you are now and towards your next move.
If you are saving for your first property (or looking to buy now) take your time to carefully research the market and the areas you like. Ensure your decision fits your budget and your lifestyle and don’t be too concerned if the place you can afford is not in the suburb where you want your kids to go to school one day. Remember, it is a stepping-stone. Most people don’t live in their first home forever.
REIWA President Damian Collins says the first home you buy is the most important because its capital growth is how you create equity to be able to afford to trade up to the next home.
“Most people buy at the lower end of the property market for their first home and through their lives, many move into higher price brackets as their family and income grow,” he says.
The key is to think long term. Don’t get too caught up on the idea that your first home has to be perfect. Chances are it won’t be and it may need some work to make it how you want it to be.
“Quite often existing homes that are a little older in established suburbs grow in value more than brand new homes in the outer suburbs. It’s nice to have everything brand new, but remember, the first property is the stepping-stone to your dream home,” says Mr Collins.
The other option you could try, as discussed in last week’s newsletter, is to rentvest.
More than the latest buzzword in property circles, ‘rentvesting’ is when people rent a home (often in a location they want to live but can’t afford to buy) and purchase an investment property in an area that fits their budget. They then rent out the investment property to help pay off the mortgage and pay their rent with a goal of selling the property later for a capital gain.
It could be a means of entering the property market sooner and plan for the second property purchase to be a home to stay put in for a while.
Again, it all comes down to doing your research and buying the first property in an area that has great potential for good capital growth in the not too distant future.