How to get into the property game before 30: Six expert tips
It can be hard to get into the property game, especially as a young person.
From saving a deposit to finding a property you actually like — that you can afford — it can all seem like a little too much.
And with house prices booming, you’d be forgiven for thinking it’s all but impossible.
So we asked the experts: buyer’s agent and co-host of the My Millennial Money podcast John Pidgeon and Story Wealth director and financial planner Sarah Leslie — for some practical, and achievable, advice on how to break into the market before you turn 30
Start saving from as soon as you finish school (or earlier)
JP: “In our teens and when we start in the workforce we often lose sight of the future because we have this new-found freedom. But those that are (saving) from 15-16 onwards are going to get into it earlier, which gives them lifestyle choices, and those that don’t get left behind.
“I’ve got three kids, aged eight, 10 and 12 and they’ve already got a concept of money and how to trade time for money. The oldest knows the cost of property and if mum and dad are talking about it, they might not be listening but it’s ingrained in their mind.
SL: “Pay yourself first and set up automatic saving plans, even if it’s 10 or 20 per cent of what you earn.
“Be smart about your money and your spending, set a budget and be realistic. A really good resource is the government’s Budget Smart website.
“I also think things like spending smarter – being aware of cashback offers, vouchers, discount codes. Really avoid bad debt like credit cards – try and only spend your own money.”
Use a parental guarantor
JP: “It’s not as risky as it seems as long as the child has the capacity to pay the mortgage each month.
“If the parents are fortunate to have invested or bought well, they’ve probably got another $1m in equity sitting there. It’s just the growth of the property they own and using that as collateral.”
SL: “This is a good option. While there’s a lean on the parent’s house, they don’t have to come up with cash or put their hand in their pocket. I find that typically parents really do want to help and this is an easy way to facilitate that. There is of course risks associated with it, like what if your child doesn’t make the repayments. What I would suggest is that the parents make sure they’ve had a robust talk around it, the entry and exit arrangements, how long it will be there.”
Live at home for longer & save
JP: “Staying at home longer has massive inroads to a deposit. I have clients that are saving $30,000-$40,000 a year at home, while their friends are paying rent. That’s three to four years of a deposit fast-tracked.
“It’s really just about addressing it daily, weekly, monthly — like your health or fitness. It’s those little things, putting a little bit of money away each month, that’s what’s going to create principles.
SL: “It’s a really good gig living at home and I definitely think kids are living at home longer now. It is one sure way to keep your expenses down because you typically get a fair bit of support.”
JP: “We do probably three to four calls a week with people in Sydney or Melbourne who want to live in the suburb they grew up in and want some guidance on how to do it.
“It’s either buy a one-bedroom apartment in that suburb or look at something like rentvesting (renting in a suburb you want to live in and buying, then renting out, a property somewhere cheaper).
SL: “Rentvesting is a really perfect start to get yourself into the market. I look at it as living for your lifestyle and buying from an investment perspective, but you still want to do your research and make sure it’s in an ideal location.