Buying

Single and ready to mingle…in the property market

There comes a time in life when you’re over living with other people. You’re sick of cleaning up after your housemates, the constant unwanted visitors or maybe you’re just ready for the freedom to do your own thing without judgement. Life would be amazing if only you had your own place. But next comes the reality faced by every twenty or thirty something in Australia: how can a single person afford to buy?

Property prices are high enough for couples so how are you going to do it on your own? You are more resilient than your realise, and you have what it takes to save up for a deposit – in a reasonable amount of time too.

How much is a house deposit?
Realistically, you are going to need $60,000 – $100,000 for a property valued between $300,000 – $500,000. The deposit can be as low as 5% but if you can pay 20% upfront the bank will give you such a better deal. With only a small deposit banks consider you a high risk and insist on loan insurance. It is a huge expense that only protects the bank, not you, if something goes wrong. So be realistic about your goals and set yourself a budget.

How do I save this much money?
First, you have to believe that you can save up for a house deposit. It is not out of reach. It will take commitment to the cause but at the other end you will have you’re first home.

Housing and utilities:
Living expenses take the biggest bite out of your pay. Changing your address while you save can help you achieve your savings goal.

  • No one wants to do it but could you move back home to save on living rent and bills? Parental board rates are guaranteed to be lower than whatever landlords charge. You might even score a Sunday night roast every now and again as a bonus.
  • Renters- consider the savings in your account if you switch to a cheaper place and could split bill costs with more housemates.

Transport:

  • Add up how much your car costs each year. $50 a week in petrol, $700 on insurance, $200 monthly repayments, $300 for a service and $100 for that parking fine, we all know we are going to get over the year – and we haven’t even entered a toll way yet. Compare that to a monthly ticket on public transport and it’s a no brainer. If you can get away with selling your car or reducing the usage, your savings account will grow that much faster.

Food:

  • We live in a café culture where there are so many delicious food outlets lining our streets. To save money, skip Sunday brunch and spend the morning preparing lunches for the week with fresh produce bought from markets or on special at the supermarket.
  • It’s hard to bear the thought of going without coffee in the morning, but consider sidestepping the $4 morning coffee for some home brew instead.

Nightlife:
Having too many big nights on the town attacks your savings account. Instead, change up the way you indulge on the weekend to get the most out life without compromising your goals.

  • Start by paying for your own drinks rather than buying rounds.
  • Swap cocktails for cider.
  • Instead of big nights out, plan big nights in.

Social life:
Friends are expensive to have when they’re still living the high life. They tempt you to spend your house deposit with well-meant invitations to money draining Sunday sessions and holidays. Let them know you want their support. It simply changes how you spend time together:

  • Be active jogging or cycling,
  • Do coffee rather than big breakfasts
  • Netflix at home rather than heading to the cinema.

What kind of property should I buy?
A home is going to be the most expensive thing you ever buy, but it is the only item that will look after you in return, providing shelter for the rest of your life, not to mention a financial investment with resale value. So, what matters when deciding on your new address?

Location:
Australians are obsessed by location. According to the experts, proximity to beaches and good transport connections make a property valuable. It certainly makes living a healthy lifestyle and getting to work that much easier. Still, it’s probably true that being close to where your mum and best mate live, is worth everything. Living independently is a great way to enjoy solitude but it needs to be balanced. Having the energy and means to participate in a social life are key ingredients to a happy life.

Lifestyle:
Match your lifestyle needs with a neighbourhood that has it all. For example, a lover of live music needs to be close to the inner city music scene rather than in an old suburb that’s dead after dark. Be mindful that people feel out of place if they live in area out of kilter with their own values and interests.

Size:
The privilege of cleaning and maintenance is entirely yours as a home owner. There is no property manager to call for help. A smaller, newer build is more manageable if you’re not interested in doing your own renovations.

Making the decision to purchase a house on your own is an exciting time and should make you feel proud of yourself. With some small sacrifices and hard work, you can own your own home and have space that is just for you. Give yourself a pat on the back.