With many first home buyers now struggling to afford their first home in the city they live in, due to the rising housing market, now is the time for these first home buyers to consider being an “Investor”, not a first home buyer.
When I purchase my first property in 1987 (pictured above), I was living in western Sydney but could not afford a house near to where I was living or working. I was 19 years old and just wanted to own a property, so I went on a search looking for an affordably property with a good rental return to help me pay for the property. The first house I purchased was an investment property which I paid $60,000 for, which was returning $120 per week. The house was in in Gulgong in central NSW. About two years later I was able to afford to build a new house in the small town of Wongarbon, about 20km east of Dubbo. So at 22 years old I now owned two houses, both were being leased.
About 5 years later my wife wanted to live in our own home, we were living in Merrylands (western Sydney) at the time and could not afford another house where we were living and working, so we purchase another house but at St Marys, again we lease this house. By the time i was 29 years old, this would have been in 1997 I managed to purchase another two houses in St Mary’s one of which we did move into and anther house at Emu Plains. I now owned 6 houses with a mortgage of $970,000. After all taking all rents into consideration, this large mortgage and all of the other costs like rates, insurance, repairs, at the time was costing me about $100 per week because I was only buying properties with a cash positive return.
It did take me about 10 years of property investing in areas I did not living in to be able to afford a home for my young family.
If you, or you know someone today who is struggling to buy their first home, someone who does not have the opportunity to borrow or use the equity from mum and dad, there is another way to own property. Look for an affordable area within your budget, then look for a property with a higher rental return. Properties which need some work do present as better opportunity to gain quick equity. All of the established houses i have have purchase needs a coat of paint, some work to the kitchen, bathroom or floor coverings. But but doing this work I have been able to build quick equity and obtain her rental returns, both of which have enable me to buy more houses.
Housing today is still affordable, it may just be that you need to look at being an investor, rather than on owner occupier for a period of time.
Today, the Southern Moreton Bay Islands which are located within 50km of Brisbane and the Gold Coast, present young property buyers with a similar opportunity to what I found in the late 1980’s.
Chris McGregor – 0420 555 997