Young buyers, grab these home-buying tips and get on the property ladder!

Buying a home is hard. For young people it is harder still, and for young people in Auckland it is harder again!

 

But difficult does not mean impossible. Countless past success stories show that some young people on modest incomes have still managed to get on the property ladder and buy their first home with a few tricks of their own.

 

Today, we look at the tips that have helped young people get on the property ladder.

 

Tip one: Find a partner

 

No joke: finding a boyfriend or girlfriend can greatly improve your chances of buying a home. When you are single, buying can seem a distant prospect. Once you have a partner, marriage can suddenly seem within reach, and buying a home can easily make its way onto the agenda.

 

Another benefit of finding a partner is saving money. Where you once needed to rent separate rooms, you now need only one; where you once both ordered takeaways, you can now cook together; where you once saved alone, you can now save together…

 

Tip two: Save more, drink less

 

Saving and living within your means are deeply ingrained habits among older Chinese people. Younger generations, however, can easily be dazzled by a social life full of entertainment and indulgence. Before you know it, your deposit has turned into bottles of beer and tickets to events…

 

Almost all young people who successfully buy a home have much quieter social lives than their peers. That does not mean living in the wilderness. These buyers simply choose social activities that cost nothing, such as free exhibitions and outdoor pursuits.

 

Success story: William Keedwell bought this house on Cockburn St for $190,000 when he was 19 years old. He sold it 4 years later for $267,000. (Source: Stuff)

 

Tip three: Cut spending, then increase your income

 

Generally speaking, money for a home comes from three sources: a windfall, such as a lottery win; savings; or earnings.

 

To save enough for a deposit, many young buyers look for opportunities to earn extra income through part-time work as well as cutting back on spending. Another benefit of a second job is that being busy leaves you fewer opportunities to spend. Two benefits in one!

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Tip four: Accept a little help from your parents

 

Living off your parents may carry a slightly negative connotation, but with house prices so high, it is an unavoidable reality. Most young people who successfully buy a home choose to live with their parents or share a cheap rental with others to save money. If they still cannot afford a deposit, they ask their parents to contribute.

 

This is common worldwide, not just in New Zealand. The key is not whether to accept parental help, but to agree with your parents on how they will help and how much. There is nothing wrong with insisting on doing it yourself, although you risk house prices rising faster than you can save a deposit.

 

Success story: After Jake and Ella Horan bought their first home in Westmere, they continued living with their parents and rented out the property to ease the pressure of mortgage repayments. (Source: Stuff)

 

Tip five: Make some compromises

 

Just as everyone wants a wealthy, handsome or beautiful, considerate partner, we all hope to buy a large, inexpensive home in a great location with lovely views—ideally with a swimming pool too! But take a look at your wallet and come back to reality!

 

The people we eventually marry are often ordinary people from unremarkable backgrounds, with ordinary looks, but with endearing qualities that shine in our eyes. Our first homes, too, will usually have distinctive strengths in one or a few areas and be fairly ordinary in other respects.

 

If you insist on a good neighbourhood, you may have to settle for its worst house. If you insist on a spacious, attractive new home, you may have to choose a relatively remote location.

 

Tip six: Do not leave it until the last minute

 

Remember the last time you bought tickets to a show? You passed up the early-bird offers, only to discover the day before the concert that the good seats had all gone and even the less desirable seats cost a fortune.

 

Buying a home is much the same. Without any advance planning, if you only start paying attention when you have to buy, it will be difficult both to find a home you like and to negotiate a price you are happy with. If you know you do not want to rent for the rest of your life, the sooner you put buying on the agenda, the better—at least start by joining KiwiSaver!

 

Success story: After looking in three or four areas, Chrystal and Carl Menzies finally found the first home they wanted. (Source: Stuff)

 

There you have it: your home-buying tips. Young people who have yet to buy, let us get ready to climb onto the property ladder!